An alleged Craigslist fraud targeted would-be investors in San Antonio by pretending to be a well-known financial firm, according to an emergency cease and desist order issued by the Texas State Securities Board on Thursday.

So-called “impersonation scams” have become more frequent in the past 12-18 months, enforcement director Joe Rotunda said, potentially because of the rise of retail investors and the skyrocketing value of cryptocurrencies.

The board’s order accuses a group called Keye Midas Wealth Management and named affiliated individuals of pushing a fraudulent cryptocurrency product that promised profits of 40% per month, risk-free.

A sales agent for Keye Midas allegedly advertised the scheme through San Antonio Craigslist postings while masquerading as a representative from Ark Invest, a legitimate $22 billion company that has exploded in popularity in recent years among retail investors, a term for individual investors without professional training or institutional backing. Ark Invest’s suite of exchange-traded funds were some of the top performers on Wall Street last year.

In reality, the sales agent and his real managers at Keye Midas had no relation to Ark Invest. Instead, according to the order, the group is the financial equivalent of a ghost.

While the Keye Midas website describes it as a national investment firm incorporated in Delaware, based in California, and located in several other states, it has no actual business records, according to the order, and has taken pains to conceal its actual physical location and those who manage it.

Rotunda, who also helps run the enforcement section of the North American Securities Administrators Association, said improvements in technology have allowed even unsophisticated scammers to put together “flashy internet sites” that suggest credibility.

Fueling the increase are more recent factors from the pandemic era. Chief among them is the staggering growth in cryptocurrencies, a loosely regulated frontier in finance that has provided an easy narrative for scammers. Bitcoin was worth more than $9,000 in June 2020. In the year since, it has roughly quadrupled in value to nearly $39,000, and spiked in March to nearly $59,000.

“A decade ago, it would have been impossible to predict the investor hysteria over something like cryptocurrency offerings,” wrote Travis Iles, the securities commissioner for the Texas State Securities Board, in the board’s 2020 guide for investors. In fiscal year 2019, 30% of investigations opened by the board involved cryptocurrency offerings.

Keye Midas’ postings aimed at San Antonio retail investors add to that growing tally. The advertisements, titled “How to make 40% Monthly with your $1400 Economic Impact Payments” and allegedly disguised as an offering from Ark Invest, warned readers that they need to invest now or risk being “left behind.”

Beyond the postings in San Antonio, the board’s order accuses Keye Midas of illegally soliciting investments in various unregistered investment plans. These fraudulent products were advertised under names like the Great Mogul, Excelsior, Idol’s Eye, and Regent opportunities. According to the order, Keye Midas pitched the plans with a promise to pay returns of up to 80% in terms as short as six months, with a money-back guarantee.

None of the plans were registered or permitted for sale in Texas, and none of the parties were registered to sell securities in Texas.

Rotunda said he could not provide specific details about how Keye Midas was investigated, but offered a general practice they frequently employ.

“We often conduct undercover investigations,” he said. “One of our investigators adopts an alias, and poses as a member of the public. Then they interact with firms that are suspected of engaging in these illegal schemes, and we get to see firsthand what’s being represented from the firm to the investor.”

He said the board is not yet aware of any victims from the alleged scheme.

The Texas State Securities Board opens 350-400 cases a year, each one involving at least one fraudulent scheme and potentially dozens of victims, Rotunda said. From 2010 to 2019, the board has returned more than $45 million to investors and upwards of $36 million to the state.

Requests for comment sent to Keye Midas’ listed contact information were not returned.

Waylon Cunningham covered business and technology for the San Antonio Report.