Cypress man who led cryptocurrency business accused of stealing millions in scheme

Brian Fontenot was a company leader of XUSD Blockchain Holdings

CYPRESS, Texas – A yearslong investigation by federal and state authorities in Georgia has led to the indictment and arrest of 42-year-old Brian Fontenot, a Cypress man who allegedly helped run a fraudulent cryptocurrency business.

Fontenot is one of eight business partners connected to XUSD Blockchain Holdings currently indicted in the South Georgia Judicial District. Other company leaders have been arrested from Florida to New York to Tennessee, according to a law enforcement source.

The 91-count indictment against Fontenot accuses him racketeering, theft by taking, theft by deception, and theft by conversion. He’s currently in the Galveston County Jail awaiting extradition to Georgia.

“Under the guise of seemingly legitimate businesses, the owners, employees, and associates used the business front to deceive persons regarding the purchase of a cryptocurrency called XUSD, XUDG, and XUSDP, and convert stolen United States currency,” investigators wrote in a warrant.

At one point, Fontenot allegedly worked as the company’s chief technology officer, according to records, but a law enforcement source with direct knowledge of the investigation hesitated to describe it as actual “work.”

Fontenot was responsible for creating the smart contracts and source code for the coin, according to another law enforcement source.

The U.S. Marshals Service confirmed law enforcement executed a search warrant with the Harris County Precinct 5 Constable’s Office at Fontenot’s home on Amber Patina Lane late last week, when he was arrested.

A law enforcement source said he also had a $200,000 Range Rover.

The scheme, which has gone on for years, has resulted in losses of more than $3 million for victims in southwest Georgia, the sources said, but investigators believe victims around the world have lost millions more than that.

“(The investigation) gets bigger and bigger every single day,” said Christopher Quinn, senior assistant district attorney for the South Georgia Judicial Circuit.

The company, XUSD Blockchain Holdings, allegedly claimed to be the first asset-backed cryptocurrency in the world and leaders marketed it as the best coin in the world, which would revolutionize the world and eventually be used by everyone, according to the law enforcement source with direct knowledge of the investigation. Leaders also claimed the U.S. dollar had no value and wasn’t real.

Victims, who thought they were investing, could buy in at a certain amount per token, and when the token hit the market, they were told they could double their input, the source said. Victims kept being told the coin would “go live” soon, but that never happened. The release date or type of coin would keep changing.

Victims would communicate with the “company” on a Discord chat, the source said, where discussions often focused on “getting rich” and life-changing money. Victims invested anywhere from $100 to at least $400,000, the source said. At least 100 victims have already contacted law enforcement.

The suspects allegedly used the money to fund luxurious lifestyles, paying for their own living expenses and even rented a private jet on two occasions, according to sources.

The investigation is ongoing and it’s not clear yet when Fontenot will be extradited to Georgia.

Anyone who purchased XUSD coins or has any information which may be helpful to this investigation concerning Robert Dunlap, Brian Fontenot, James (Jim) Nelson, Richard Bailey II, Michael Baldree, META 1, XUSD Blockchain, XUSDP, XUSDP2, XUSDG, XUSDQ, XUSD ICTS, ICTS TRUST ATOA, XUSD ONE or XUSD 2.0, should contact authorities in Georgia at xusd.tips@bakerso.org.

Investigators need to know victim name, address, city/state/country, phone number, the name of the coin purchased, date of first and last investment, total amount invested, person who was paid for coins, city and state of coin broker, and any other information that may help in the investigation.


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