SEC v. Justinas Butkus; HMC Trading, LLC; and HMC Management, LLC, No. 1:25-cv-1695, Southern District of New York (Feb. 28, 2025) — Complaint

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE
COMMISSION,

        COMPLAINT
Plaintiff,
 25-cv-1695
-against-
        JURY TRIAL DEMANDED
JUSTINAS BUTKUS, also known as “DARIUS
KARPAVICIUS,” individually and doing
business as TBO CAPITAL GROUP and GRAY
CAPITAL GROUP;
HMC TRADING, LLC; and
HMC MANAGEMENT, LLC,

Defendants,
and

DK AUTO, LLC,

                                                  Relief Defendant.

COMPLAINT

 Plaintiff Securities and Exchange Commission (the “Commission” or “SEC”), for its
Complaint against Defendants Justinas Butkus, also known as “Darius Karpavicius,”
(individually and doing business as TBO Capital Group and Gray Capital Group), HMC Trading,
LLC, HMC Management, LLC (collectively “Defendants”) and Relief Defendant DK Auto,
LLC, alleges as follows:
SUMMARY

1. From at least December 2021 through at least March 2023 (the “Relevant
Period”), Defendants engaged in a fraudulent scheme in which they raised approximately $4.1
million from dozens of investors by selling interests in mutual funds that did not actually exist.

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2. Defendants’ scheme operated through websites for purported investment firms
TBO Capital Group and Gray Capital Group.  Each website claimed its investment funds were
managed by a cadre of experienced industry professionals whose pictures were prominently
featured on the websites.  According to the websites, the investment funds had annual returns of
50+% since inception without a single down year.
3. Although the websites were named for separate companies supposedly offering
separate mutual funds, the names and pictures of three of the four managers on the two websites
were identical.  The websites also listed the same company address and telephone numbers.  The
graphics and layout on the website and fund descriptions were also near copies.
4. TBO Capital Group, Gray Capital Group, and all of the industry professionals
purportedly responsible for managing the respective investment funds were fictitious; not one of
them actually existed.
5. The investments sold by TBO Capital Group and offered by Gray Capital Group
were fake, too, not a single security was purchased with investor funds.  Investors were
instructed to send or wire money to accounts owned by HMC Trading, LLC or HMC
Management, LLC, entities incorporated and controlled by Butkus, who sought to conceal his
identity by using the alias, “  Darius Karpavicius.”  Butkus then transferred approximately 80
percent of those funds to accounts in the name of “Karpavicius” and HMC Trading’s name at
crypto asset trading platforms.  Butkus misappropriated the remaining funds for personal use and
to perpetuate Defendants’ fraud.
6. By engaging in this conduct, Defendants violated, and unless enjoined, will
continue to violate, Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”)

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[15 U.S.C. § 77e(a) and (c) and 77q(a)]; Section 10(b) of the Securities Exchange Act of 1934
(“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [10 C.F.R. 240.10b-5].
7. By this Complaint, the SEC seeks: (i) permanent injunctive relief; (ii)
disgorgement of ill-gotten gains with interest from Defendants and the Relief Defendant; and
(iii) civil penalties.
JURISDICTION AND VENUE
8. The SEC sues under Section 20(b) and 20(d) of the Securities Act [15 U.S.C. §§
77t(b) and 77t(d)] and Section 21(d) and 21(e) of the Exchange Act [15 U.S.C. §§ 78u(d) and
78u(e)].
9. This Court has jurisdiction over this action pursuant to Sections 20 and 22 of the
Securities Act [15 U.S.C. §§ 77t and 77v], and Section 21 and 27 of the Exchange Act [15
U.S.C. §§ 78u and 78aa].
10. Defendants, directly and indirectly, have made use of the mails or the means or
instruments of interstate commerce in connection with the transactions, acts, practices, and
course of business alleged herein, by, among other means, soliciting investments via the internet
and accepting investor deposits via wire transfer.
11. Venue is proper in the Southern District of New York pursuant to Section 22(a) of
the Securities Act [15 U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].
Certain of the transactions, acts, practices and courses of business constituting the violations
alleged herein occurred within the Southern District of New York, and elsewhere, and were
effected, directly or indirectly, by use of the means or instruments or instrumentalities of
transportation or communications in interstate commerce, or of the mails.  As detailed below,
from at least December 2021, Defendants claimed their primary office was located at 244

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Madison Avenue, #1149, New York, NY 10016.  Additionally, Defendants instructed certain
investors to mail their investments to Defendants via paper check at this address, or to wire
money to banks located in this district.
DEFENDANTS

12. Justinas Butkus, also known as “Darius Karpavicius,”  age 28, is a Lithuanian
citizen who resides in the United States.  Butkus tried to conceal his identity by using a
Lithuanian passport that was doctored such that it bore the name “Darius Karpavicius,” but
showed a photograph of Butkus.  Butkus engaged in the conduct described herein both
individually and doing business as TBO Capital Group and Gray Capital Group.  Butkus, using
his alias “Karpavicius,”  incorporated HMC Trading, LLC and HMC Management, LLC (the
“HMC Defendants”), and Relief Defendant DK Auto, LLC.  He is the sole member of each
entity.  Butkus, again using his alias “Karpavicius,”  opened bank accounts in the name of the
HMC Defendants and Relief Defendant and oversaw and controlled the transferring of funds into
and out of those accounts.  Through the HMC Defendants’ bank accounts, Butkus purchased
critical services used to operate Defendants’ fraudulent scheme.  Butkus operated his fraud using
the “Karpavicius” alias, the entity defendants, and by acting through two d/b/as:
a. TBO Capital Group was a fraudulent company through which Butkus did business,
purportedly located at 244 Madison Avenue, #1149, New York, NY 10016 and on
the internet at tbocapital.com.  TBO Capital Group claimed to be an employee-
owned company and the sole manager of TBO Capital Healthcare Fund,
purportedly a mutual fund.  TBO Capital Group did not really exist and has never
been registered with the Commission in any capacity.

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b. Gray Capital Group was a fraudulent company through which Butkus did business,
purportedly located at 244 Madison Avenue, #1149, New York, NY 10016 and on
the internet at graycapital.fund.  Gray Capital Group claimed to be an employee-
owned company and the sole manager of Gray Capital Healthcare Fund,
purportedly a mutual fund.  Gray Capital Group did not really exist and has never
been registered with the Commission in any capacity.
13. HMC Trading, LLC (“HMC Trading”) is a limited liability company incorporated
by Butkus, using the alias “Karpavicius,”  in North Carolina on December 2, 2020.  The
formation documents for HMC Trading list its principal place of business as 11010 Lake Grove
Blvd, Suite 100-123, Morrisville, NC 27560.  That address is a private mailbox at a retail
shipping store leased by Butkus under his alias, “  Karpavicius.”  HMC Trading’s bank accounts
received investor funds through the fraud.  Investors seeking to send their investment via wire or
ACH transfer were instructed to transfer money to accounts in HMC Trading’s name.  Other
investors made their investment via checks made out to HMC Trading.  Investors were instructed
to mail their checks to TBO Capital Group’s New York address.  That address is a private
mailbox at a retail shipping store leased by Butkus under his alias, “  Karpavicius.”  Butkus
arranged to have mail received at that mailbox forwarded to his Morrisville, NC private mailbox.
HMC Trading is Butkus’s alter ego; it has no employees or infrastructure, was completely
controlled by Butkus, and does not conduct any business separate from Defendants’ fraud.
14. HMC Management, LLC (“HMC Management”) is a limited liability company
incorporated by Butkus, using his alias “Karpavicius,”  in South Carolina on March 22, 2022.
Investors were instructed to transfer money to accounts in HMC Management’s name via wire or
ACH transfer.  Other investors mailed their investment via check made out to HMC

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Management.  HMC Management’s bank accounts received investor funds through the fraud.
HMC Management is also Butkus’s alter ego; it has no employees or infrastructure, was
completely controlled by Butkus, and does not conduct any business separate from Defendants’
fraud.
RELIEF DEFENDANT
15. DK Auto, LLC (“DK Auto”) is a limited liability company incorporated by
Butkus, using his alias “Karpavicius,” in North Carolina on December 2, 2020.  DK Auto’s
formation documents list its principal place of business as 11010 Lake Grove Blvd, Suite 100-
123, Morrisville, NC 27560.  That address is a private mailbox at a retail shipping store leased by
Butkus, under his alias, “Karpavicius,”  Funds were transferred from HMC Defendants’ accounts
to accounts in DK Auto’s name.
FACTUAL ALLEGATIONS
A. DEFENDANTS USED MATERIALLY FALSE AND MISLEADING
STATEMENTS TO SOLICIT INVESTMENTS

16. From at least December 2021 through at least March 2023, Defendants have
solicited investors for non-existent mutual funds run by TBO Capital Group, and later Gray
Capital Group.  On or around September 19, 2022, TBO Capital Group’s website was
deactivated, most email addresses at tbocapital.com were deleted, and phone calls to numbers
posted on the website went unanswered.  On or about this time, the website for Gray Capital
Group went active.
17. In many respects, TBO Capital Group’s and Gray Capital Group’s websites are
duplicates.  The websites share similar layouts, graphics and logos as well as three of the same
purported fund managers.  The websites list the same New York address and phone numbers.
Both websites described the TBO Capital Group and Gray Capital Group employees as “highly

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experienced portfolio managers who possess over 20 years of experience in the industry.”  Both
websites describe the Group as being “employee-owned,” with employees who “hold substantial
personal capital” in the Group and whose “deferred cash compensation is directly linked to
performance.”  In other locations, the websites claim that their “portfolio managers” have “25
years of experience working asset management.”
18. Defendants claimed TBO Capital Group was purportedly managed by four
individuals: Andrew Taubman (CEO), Daniel Brown (CIO), David Freedman (Fund Manager)
and John Olsen (FCFO).  Images of the four purported executives were positioned above links to
entirely fictitious biographies available on a prominent social media website.

19. According to Defendants, TBO Capital Group’s executives were also supported
by “Long-tenured advisors of three PHDs and one MD in internal medicine.”
20. Gray Capital Group’s website claimed that its fund is managed by three of the
same four individuals purportedly managing TBO Capital Group, along with Alexandre Grande
(Fund Manager).  Again, the website featured the same photos of those purported executives.

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21. Both websites used the same graphics to illustrate performance: for example,
identical graphs (TBO Capital on the left, Gray Capital on the right) illustrated the purported
performance of their mutual funds in comparison to the “MSCI ACWI Health Care
(Benchmark).”

22. Defendants’ websites contained numerous misrepresentations regarding the
consistently high performance of their purported mutual funds.
23. Although Defendants never made any investments, TBO Capital Group’s and
Gray Capital Group’s websites falsely claimed that their mutual funds launched in 2015 and have
since enjoyed a “50% + Average annual return for the last 5 years.”  Both websites described the

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mutual funds as “[o]ne of the Market’s Most Effective Diversification Strategies,” and claimed
to “help-our clients achieve long-term positive returns on investments.”  The websites also
described the purported mutual funds as “Industry-leading investment returns with a focus on
risk management.”
24. TBO Capital Group’s website also offered for download a seemingly detailed
Annual Report, and a Fund Fact Sheet and Prospectus.  According to the Annual Report, TBO
Capital Group had $126,769,226.16 in assets under management as of December 2020.  The
Annual Report also included a breakdown of the mutual fund’s allocation, including 35.4% in
Biotechnology, 21.1% in Health Care Equipment and Supplies, and 18.1% in Pharmaceuticals.
The Annual Report showed the mutual fund’s entire portfolio as of December 31, 2020 and
concluded with a fabricated “Report of Independent Registered Public Accounting Firm” from
what appeared to be a legitimate accounting firm.  The fake report stated: “[t] he financial
statements, in our opinion, fairly represent the Fund’s financial position, results of its operations,
changes in net assets, and financial highlights of the periods audited in all material respects, in
full accordance with the accounting standards required in the United States of America.”
25. Gray Capital Group’s website claimed it had $150 million in total net assets.  It
also purported to list the portfolio composition of its mutual fund with 44.7% in crypto assets,
38.8% in Pharmaceuticals, and 20.3% in Biotechnology.  The website also listed the mutual
funds supposed top holdings, which include various crypto assets, prominent pharmaceutical
companies, and other publicly traded companies.
26. TBO Capital Group’s website also promised the payment of monthly dividends,
which could either be reinvested into an investor’s account or paid out monthly.  Gray Capital
Group purported to offer daily, weekly, monthly, or yearly dividends.

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27. Defendants repeated similar materially false and misleading statements about the
funds’ assets and performance in internet advertisements and at least one press release,
attempting to lure potential investors to the TBO Capital website.
28. More specifically, between January and May 2022, Butkus paid a well-known
technology company (“Company A”) approximately $400,000 for online advertisements touting
TBO Capital.  These advertisements included headlines such as “Best Returns Healthcare Fund,”
“Over 60% APY,” and “Best Investment 2022,” and directed internet users to TBO Capital’s
website.  Many TBO Capital investors learned of TBO Capital from these advertisements.
29. Similarly, on February 14, 2022, in an apparent effort to drive more traffic to
TBO Capital Group’s website, Butkus created an account with a news distribution service to
have a press release distributed across multiple digital media outlets announcing that TBO
Capital Group was “reducing the fees on all investment balances starting from the 1
st
 of March
2022.”  The press release went on to falsely describe TBO Capital Group as having “25 years of
industry experience, plus an average annual rate of return of 50% in the last five years.”
According to the press release, TBO Capital Group was managed by “highly experienced
portfolio managers who possess over 20 years of experience in the industry.”
B. BUTKUS OPERATED THE FRAUDULENT SCHEME

30. TBO Capital Group’s and Gray Capital Group’s websites, through which
Defendants perpetrated the fraud, provide the same phone numbers and street address.
According to Defendants, TBO Capital Group and Gray Capital Group operated at the same
address: 244 Madison Ave, Ste. 1149, New York, NY 10016.  While TBO Capital initially listed
its phone numbers as (877) 839-3943 and (212) 710-5901, it later used the same numbers listed
on the Gray Capital website:  (877) 839-3943 and (212) 796-6927.

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31. In reality, that address is a private mailbox at a retail shipping store at 244
Madison Avenue.  Butkus personally secured the lease for this mailbox using his alias,
“Karpavicius,” and a copy of his doctored Lithuanian passport.  He arranged for all mail received
to be forward to a second mailbox he leased at 11010 Lake Grove Blvd, Suite 100-123,
Morrisville, NC 27560.
32. The (877) 839-3943 and (212) 710-5901 phone numbers were obtained by Butkus
on or around December 2, 2021 from a company that provides toll free and phone forwarding
services.  The account was initially opened under his alias, “Karpavicius,”  though in September
2022 he changed the account name to “ kevin kevin.”  Butkus paid for these phone services using
one of the HMC Trading bank accounts he controlled.  On February 10, 2022, Butkus logged
into this phone services account from IP address 107.15.119.123 (“Butkus IP address 1”) to
change the number to which calls were forwarded.  Butkus would later use this IP address to
manage the fraudulent TBO Capital website and services supporting the website.
33. On December 31, 2021, Butkus contacted Company A online to create the
tbocapital.com email addresses [email protected], at 7:53:25 EST, and [email protected], at
9:07:14 EST.  To create an email address, Company A required the user to provide their name,
and Butkus provided his alias, “Karpavicius,”  to create both addresses.  Butkus created the
[email protected] email address from IP address 172.72.20.238 (“Butkus IP address 2”).  Less
than two hours after being used to create the [email protected] email address, Butkus IP
address 2 was used at 9:29:55 am EST to log into TBO Capital’s account at the company hosting
its website.  The [email protected] email account was also accessed from Butkus IP address 1
in March and April 2022.

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34. On or around January 13, 2022, using his tbo@tbocapital email account, Butkus
created two accounts with Company A, an advertisement account and payment account.  Butkus
used these accounts to post and pay nearly $400,000 for the internet advertisements described in
paragraph 28 above.  Here, too, Butkus paid these bills using stolen investor funds held in one of
the HMC Trading bank accounts he controlled.
35. On or around January 19, 2022, using his [email protected] email address,
Butkus opened an account with a company that provided a service preventing internet bots from
clicking on the TBO Capital internet ads described in paragraph 28.  Butkus paid for these
services using one of the HMC Trading bank accounts he controlled and later accessed the
account from Butkus IP address 2.
36. Similarly, Butkus created the account for the February 14, 2022 press release
described in paragraph 29, using his [email protected] email address.  He paid for these
services using stolen investor funds held in one of the HMC Trading bank accounts he
controlled.
37. TBO Capital Group’s website also featured a chat window where potential
investors could communicate with TBO Capital as they made their investment decisions.  Butkus
used his [email protected] email address to register for these services on or around February
22, 2022 and provided the credit card number he used to pay for the services using Butkus IP
address 1.  As before, Butkus paid for the services using stolen investor funds from one of the
HMC Trading bank accounts he controlled.  Through the means described above, Butkus
engaged in the scheme to defraud investors both individually and by doing business as TBO
Capital Group and Gray Capital Group.

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C. DEFENDANTS USED THE MATERIALLY FALSE AND MISLEADING
STATEMENTS AND OTHER DECEPTIVE CONDUCT TO STEAL MILLIONS
FOR BUTKUS’S PERSONAL BENEFIT AND TO CONCEAL THEIR
MISCONDUCT

38. Defendants used the materially false and misleading statements outlined above to
convince 64 retail investors to invest approximately $4.1 million in TBO Capital Group’s
purported fund.  The vast majority of these assets were stolen for Butkus’s personal benefit while
the remainder was used to perpetuate the fraudulent scheme.
39. Prospective TBO Capital Group investors were instructed to first create an online
account through the tbocapital.com website.  Once an investor’s account was created,
Defendants provided instructions to either send funds electronically to accounts in the name of
HMC Trading or HMC Management, or to mail checks made out to those entities to TBO
Capital’s address in New York.  As noted, however, TBO Capital’s address was actually
Butkus’s private mailbox at 244 Madison Ave, Ste. 1149, New York, NY 10016.
40. To receive these investor assets, Butkus, using his alias “Karpavicius,” opened –
and solely controlled – each of the HMC Defendants’ bank accounts.  More specifically, on each
of March 23, 2021, March 24, 2021, March 30, 2021, November 5, 2021, and March 14, 2022,
Butkus opened a bank account in the name of HMC Trading at five well-known banks.  Then, on
April 15, 2022, Butkus opened an account for HMC Management with a sixth well-known bank.
41. To create the appearance that the enterprise was legitimate and prevent investors
from discovering their misconduct, Defendants deceptively fabricated online accounts for each
TBO Capital investor.  The fake accounts purported to show the status of each investor’s
investment.  For those investors that requested to have their dividends reinvested, dividends
appeared to accrue monthly in their online accounts.  These dividends were completely fake
because there was no mutual fund and no actual investments that could generate any returns.

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42. For those investors that requested to have their dividends paid on a monthly basis,
Defendants either mailed the investors dividend checks drawn on the HMC Defendants’ bank
accounts or wired them funds electronically from those accounts.  In total, approximately 11
investors chose to receive monthly dividend payments and they received approximately $42,000
during the course of the scheme.  Because Defendants did not actually operate any mutual funds,
these dividend payments were actually Ponzi-like payments made from funds Defendants
obtained from newer investors.
43. The appearance, or receipt, of purported dividends prompted some investors to
invest additional money and allowed Defendants’ scheme to continue undiscovered.
44. Ultimately, of the approximately $4.1 million invested, Defendants stole
approximately $3.6 million for Butkus’s personal benefit, including for groceries, restaurants,
hotels, clothes, cash withdrawals, and crypto asset purchases.  The cash withdrawals and crypto
asset purchases, in particular, demonstrate that Butkus was the mastermind, and the primary
beneficiary of, the fraudulent scheme.
45. Butkus withdrew approximately $350,000 of the investors’ funds in cash from
various locations, including around the Morrisville, North Carolina area and Greer, South
Carolina area.  On August 18, 2022, a security camera in a bank in Rock Hill, South Carolina
captured him depositing a check worth $21,500 of stolen investor funds into, and withdrawing
$8,000 in cash from, his personal bank account.  The image matches the photo in the doctored
passport referenced in paragraph 31 above.

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46. Similarly, the crypto asset trading platforms Butkus used to spirit away his ill-
gotten gains required him to provide a photograph of himself before completing his transactions.
The redacted copy of one of these photos shown below matches the doctored passport photo and
bank security image referenced in paragraphs 31 and 45, above, and also shows Butkus holding
the doctored passport in his alias name, “Darius Karpavicius.”

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47. On or about September 19, 2022, the TBO Capital Group website stopped
working.  Calls to the phone numbers listed on the website went unanswered.  Email addresses
listed on the website were deleted.  Investors lost access to their online TBO Capital Group
accounts.
48. In or around September 2022, the Gray Capital website became active and began
offering securities to investors in an apparent attempt to continue the TBO Capital Group
scheme.  In or around March 2023, the Gray Capital website was deactivated.
D. DEFENDANTS VIOLATED THE FEDERAL SECURITIES LAWS
49. The interests in the mutual fund offered and sold by the Defendants were
securities within the meaning of the Securities Act and the Exchange Act. That the funds were
fictitious does not change this fact.  The Defendants’ statements to investors are what control this
analysis and Defendants unmistakably – though falsely – offered the investors an investment in a
security.
50. The Defendants said they would pool the investors’ assets into the Defendants’
accounts and represented that they would invest those funds in interest in the purported mutual
fund managed by TBO Capital Group and return a profit.  The Defendants further stated that
TBO Capital Group and its employees’ profits and earnings were directly tied to the performance
of the TBO Capital Fund and thus tied to investors’ fortunes.
51. Investors considered the interests in the Defendants’ mutual funds to be
investments and were interested in the significant profits the funds were expected to generate that
were touted by Defendants.

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52. Defendants engaged in the conduct described herein, including the offer and/or
sale of the interests in the TBO Capital Group fund and the offer of interests in the Gray Capital
Group mutual funds, by use of the means or instruments of transportation or communication in
interstate commerce, the instrumentalities of interstate commerce, and/or by use of the mails.
53. Defendants solicited investments from investors via the internet and secured
investments from investors in multiple states through the instrumentalities of interstate
commerce.
54. Defendants did not register their sale of interests in the mutual fund with the
Commission as required by Section 5 of the Securities Act and the sales were not otherwise
exempt from registration.
55. From at least December 2021 through at least March 2023, the Defendants
engaged in a long-running course of conduct designed to deceive investors in the offer and/or
sale, in connection with the purchase and/or sale, of interests in their purported mutual funds.
56. The Defendants initiated the fraud by using false websites, fabricated press
releases, a false identity and doctored passport, and opened bank accounts with the sole purpose
of misappropriating investor funds.
57. The Defendants employed several deceptive acts to make the transactions appear
as legitimate investments, including by creating bogus online accounts where they pretended to
deposit dividend returns and mailing and wiring dividend payments to investors drawn from
funds invested by other investors.
58. Butkus, and thus the entity Defendants he solely controlled, knowingly made
materially untrue statements designed to deceive investors.  For instance, Defendants falsely
represented the identities – and existence – of the executives purportedly managing TBO Capital

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Group and Gray Capital Group, the business operations and performance of those entities, and
the use of investor funds.
59. A reasonable investor would consider material the misrepresentations and
omissions described herein including, among other things, misrepresentations and omissions
regarding the high rate of returns on investment and the use of investors’ assets in deciding
whether or not to purchase interests in Defendants’ purported mutual funds.
60. In connection with the fraudulent conduct described herein, Defendants acted
knowingly or recklessly.  Butkus, and thus the entity defendants he solely controlled, knew or
were reckless in not knowing, that they were making material misrepresentations.
61. Similarly, Defendants knew or were reckless in not knowing, that investor funds
were not being used as promised.
62. Defendants used devices, schemes, and artifices to defraud investors, and engaged
in acts, transactions, practices, or coursers of business that operated as a fraud or deceit upon
investors.
63. In addition to the numerous misrepresentations discussed herein, among other
things, Defendants misled investors and misappropriated investors’ funds for their personal use
and benefit.

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CLAIMS FOR RELIEF

FIRST CLAIM FOR RELIEF
Violations of Sections 5(a) and 5(c) of Securities Act
(All Defendants)

64. The Commission re-alleges and incorporates by reference herein paragraphs 1
through 65.
65. By virtue of the foregoing, without a registration statement in effect as to that
security, Defendants, directly and indirectly, (a) made use of the means and instruments of
transportation or communications in interstate commerce or of the mails to sell securities through
the use or medium of any prospectus or otherwise; (b) carried or caused to be carried through the
mails or in interstate commerce, by any means or instruments of transportation, any such security
for the purpose of sale or for delivery after sale; and (c) made use of the means and instruments
of transportation or communication in interstate commerce or of the mails to offer to sell through
the use or medium of a prospectus or otherwise, securities as to which no registration statement
had been filed.
66. By reason of the conduct described above, Defendants, directly or indirectly,
violated and unless restrained and enjoined, will continue to violate Securities Act Sections 5(a)
and 5(c) [15 U.S.C. §§ 77e(a), (c)].

SECOND CLAIM FOR RELIEF
Violation of Sections 17(a)(1), (2) and (3) of the Securities Act
(All Defendants)

67. The Commission re-alleges and incorporates by reference herein paragraphs 1
through 65.

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68. By reason of the conduct described above, Defendants, in connection with the
offer or sale of securities, by the use of the means or instrumentalities of interstate commerce or
of the mails, directly or indirectly, acting knowingly, recklessly, or, as to (ii) and (iii),
negligently (i) employed devices, schemes, or artifices to defraud; (ii) obtained money or
property by means of untrue statements of material facts and omissions to state material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading; and (iii) engaged in acts, practices, or courses of business which
operated or would operate as a fraud or deceit upon any persons, including purchasers or sellers
of the securities.
69. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert,
have violated, and unless enjoined will continue to violate, Sections 17(a)(1), (2) and (3) of the
Securities Act [15 U.S.C. § 77q(a)(1), (2) and (3)].

THIRD CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5(a) and (c) thereunder
(All Defendants)

70. The Commission re-alleges and incorporates by reference herein paragraphs 1
through 65.
71. Defendants, directly or indirectly, singly or in concert, in connection with the
purchase or sale of securities and by the use of means or instrumentalities of interstate
commerce, or the mails, or the facilities of a national securities exchange, knowingly or
recklessly have employed one or more devices, schemes, or artifices to defraud.
72. Defendants, directly or indirectly, singly or in concert, in connection with the
purchase or sale of securities and by the use of means or instrumentalities of interstate
commerce, or the mails, or the facilities of a national securities exchange, knowingly or

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recklessly have engaged in one or more acts, practices, or courses of business which operated or
would operate as a fraud or deceit upon other persons.
73. By reason of the foregoing, Defendants directly or indirectly, singly or in concert,
have violated and, unless enjoined will continue to violate, Section 10(b) of the Exchange Act
[15 U.S.C. § 78j(b)] and Rule 10b-5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a) and (c)].

FOURTH CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5(b) thereunder
(Defendant Butkus)

74. The Commission re-alleges and incorporates by reference herein paragraphs 1
through 65.
75. Defendant Butkus, also known as “Darius Karpavicius,” individually and doing
business as TBO Capital, directly or indirectly, singly or in concert, in connection with the
purchase or sale of securities and by the use of means or instrumentalities of interstate
commerce, or the mails, or the facilities of a national securities exchange, knowingly or
recklessly made one or more untrue statements of a material fact or omitted to state one or more
material facts necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading. By reason of the foregoing, Defendant Butkus,
directly or indirectly, singly or in concert, has violated and, unless enjoined will continue to
violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5(b) thereunder
[17 C.F.R. §§ 240.10b-5(b)].

22
FIFTH CLAIM FOR RELIEF
Unjust Enrichment
(Relief Defendant DK Auto, LLC)

76. The Commission re-alleges and incorporates by reference herein paragraphs 1
through 65.
77. DK Auto, LLC, received funds or assets, which are proceeds of the unlawful
activity alleged above.
78. DK Auto, LLC has no legitimate claims to such funds, assets, and/or property
received and it is not just, equitable, or conscionable for the Relief Defendant to retain the funds.
79. DK Auto, LLC was unjustly enriched as a result of Defendants’ fraud and the
Commission is entitled to an order, pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C.
78 § u(d)(5)], requiring DK Auto, LLC to disgorge all of the funds, assets or property it received
from Defendants that were derived from the illegal activities described above.

PRAYER FOR RELIEF
 WHEREFORE, the Commission respectfully requests that the Court enter a final
judgment:
I.
Finding of Liability
 Finding the Defendants liable for the violations alleged herein.
II.
Injunction
 In a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure,
permanently restraining and enjoining Defendants, their agents, servants, employees, and

23
attorneys and all persons in active concert or participation with any of them from violating
Securities Act Sections 5(a) and (c) and 17(a) [15 U.S.C. §§77e(a) and (c) and 77q(a)], Exchange
Act Section 10(b) [15 U.S.C. §78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];
III.
Disgorgement and Prejudgment Interest
 Ordering Defendants to disgorge on a joint and several basis the ill-gotten gains and/or
unjust enrichment they received directly or indirectly as a result of the violations alleged here
and to pay prejudgment interest thereon pursuant to Exchange Act Sections 21(d)(3), 21(d)(5)
and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)], and order Relief Defendant to
disgorge the ill-gotten gains and/or unjust enrichment it received, together with prejudgment
interest thereon.
IV.
Civil Penalty
 Ordering Defendants to pay civil money penalties pursuant to Securities
Act Section 20(d) [15 U.S.C. § 77t(d)], and Exchange Act Section 21(d)(3) [15 U.S.C. §
78u(d)(3)]; and
V.
Further Relief
 Granting any other and further relief this Court may deem just and proper for the benefit
of investors.

24
VI.
Demand for Jury Trial
 Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the Commission hereby
demands a trial by jury on any and all issues in this action so triable.

Dated: February 27, 2025

Respectfully submitted,

       /s/  Peter Lallas
      Peter Lallas (PL-2965)
Katherine Stella (KS-1004)
Benjamin Vaughn (pro hac vice application forthcoming)
[email protected]
[email protected]
      [email protected]
      (202) 551-6864 (Lallas)
      (202) 551-2113 (Stella)
      (202) 551-4848 (Vaughn)
      Attorneys for Plaintiff
      SECURITIES AND EXCHANGE COMMISSION
      100 F. Street, NE
      Washington D.C. 20549

1 

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
  
SECURITIES AND EXCHANGE 
COMMISSION, 

 

        COMPLAINT 
Plaintiff,  

 25-cv-1695  
-against-   

        JURY TRIAL DEMANDED 
JUSTINAS BUTKUS, also known as “DARIUS 
KARPAVICIUS,” individually and doing 
business as TBO CAPITAL GROUP and GRAY 
CAPITAL GROUP; 
HMC TRADING, LLC; and 
HMC MANAGEMENT, LLC, 
 

 

  
Defendants, 

and 
 
DK AUTO, LLC, 
 
                                                  Relief Defendant. 

 

  
 
 

COMPLAINT 
 

 Plaintiff Securities and Exchange Commission (the “Commission” or “SEC”), for its 

Complaint against Defendants Justinas Butkus, also known as “Darius Karpavicius,” 

(individually and doing business as TBO Capital Group and Gray Capital Group), HMC Trading, 

LLC, HMC Management, LLC (collectively “Defendants”) and Relief Defendant DK Auto, 

LLC, alleges as follows:  

SUMMARY 
 

1. From at least December 2021 through at least March 2023 (the “Relevant 

Period”), Defendants engaged in a fraudulent scheme in which they raised approximately $4.1 

million from dozens of investors by selling interests in mutual funds that did not actually exist.   

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2. Defendants’ scheme operated through websites for purported investment firms 

TBO Capital Group and Gray Capital Group.  Each website claimed its investment funds were 

managed by a cadre of experienced industry professionals whose pictures were prominently 

featured on the websites.  According to the websites, the investment funds had annual returns of 

50+% since inception without a single down year.    

3. Although the websites were named for separate companies supposedly offering 

separate mutual funds, the names and pictures of three of the four managers on the two websites 

were identical.  The websites also listed the same company address and telephone numbers.  The 

graphics and layout on the website and fund descriptions were also near copies.  

4. TBO Capital Group, Gray Capital Group, and all of the industry professionals 

purportedly responsible for managing the respective investment funds were fictitious; not one of 

them actually existed.   

5. The investments sold by TBO Capital Group and offered by Gray Capital Group 

were fake, too, not a single security was purchased with investor funds.  Investors were 

instructed to send or wire money to accounts owned by HMC Trading, LLC or HMC 

Management, LLC, entities incorporated and controlled by Butkus, who sought to conceal his 

identity by using the alias, “Darius Karpavicius.”  Butkus then transferred approximately 80 

percent of those funds to accounts in the name of “Karpavicius” and HMC Trading’s name at 

crypto asset trading platforms.  Butkus misappropriated the remaining funds for personal use and 

to perpetuate Defendants’ fraud.   

6. By engaging in this conduct, Defendants violated, and unless enjoined, will 

continue to violate, Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”) 

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[15 U.S.C. § 77e(a) and (c) and 77q(a)]; Section 10(b) of the Securities Exchange Act of 1934 

(“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [10 C.F.R. 240.10b-5]. 

7. By this Complaint, the SEC seeks: (i) permanent injunctive relief; (ii) 

disgorgement of ill-gotten gains with interest from Defendants and the Relief Defendant; and 

(iii) civil penalties.   

JURISDICTION AND VENUE 

8. The SEC sues under Section 20(b) and 20(d) of the Securities Act [15 U.S.C. §§ 

77t(b) and 77t(d)] and Section 21(d) and 21(e) of the Exchange Act [15 U.S.C. §§ 78u(d) and 

78u(e)].  

9. This Court has jurisdiction over this action pursuant to Sections 20 and 22 of the 

Securities Act [15 U.S.C. §§ 77t and 77v], and Section 21 and 27 of the Exchange Act [15 

U.S.C. §§ 78u and 78aa]. 

10. Defendants, directly and indirectly, have made use of the mails or the means or 

instruments of interstate commerce in connection with the transactions, acts, practices, and 

course of business alleged herein, by, among other means, soliciting investments via the internet 

and accepting investor deposits via wire transfer. 

11. Venue is proper in the Southern District of New York pursuant to Section 22(a) of 

the Securities Act [15 U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].  

Certain of the transactions, acts, practices and courses of business constituting the violations 

alleged herein occurred within the Southern District of New York, and elsewhere, and were 

effected, directly or indirectly, by use of the means or instruments or instrumentalities of 

transportation or communications in interstate commerce, or of the mails.  As detailed below, 

from at least December 2021, Defendants claimed their primary office was located at 244 

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4 

Madison Avenue, #1149, New York, NY 10016.  Additionally, Defendants instructed certain 

investors to mail their investments to Defendants via paper check at this address, or to wire 

money to banks located in this district.   

DEFENDANTS 
 

12. Justinas Butkus, also known as “Darius Karpavicius,” age 28, is a Lithuanian 

citizen who resides in the United States.  Butkus tried to conceal his identity by using a 

Lithuanian passport that was doctored such that it bore the name “Darius Karpavicius,” but 

showed a photograph of Butkus.  Butkus engaged in the conduct described herein both 

individually and doing business as TBO Capital Group and Gray Capital Group.  Butkus, using 

his alias “Karpavicius,” incorporated HMC Trading, LLC and HMC Management, LLC (the 

“HMC Defendants”), and Relief Defendant DK Auto, LLC.  He is the sole member of each 

entity.  Butkus, again using his alias “Karpavicius,” opened bank accounts in the name of the 

HMC Defendants and Relief Defendant and oversaw and controlled the transferring of funds into 

and out of those accounts.  Through the HMC Defendants’ bank accounts, Butkus purchased 

critical services used to operate Defendants’ fraudulent scheme.  Butkus operated his fraud using 

the “Karpavicius” alias, the entity defendants, and by acting through two d/b/as:    

a. TBO Capital Group was a fraudulent company through which Butkus did business, 

purportedly located at 244 Madison Avenue, #1149, New York, NY 10016 and on 

the internet at tbocapital.com.  TBO Capital Group claimed to be an employee-

owned company and the sole manager of TBO Capital Healthcare Fund, 

purportedly a mutual fund.  TBO Capital Group did not really exist and has never 

been registered with the Commission in any capacity.   

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b. Gray Capital Group was a fraudulent company through which Butkus did business, 

purportedly located at 244 Madison Avenue, #1149, New York, NY 10016 and on 

the internet at graycapital.fund.  Gray Capital Group claimed to be an employee-

owned company and the sole manager of Gray Capital Healthcare Fund, 

purportedly a mutual fund.  Gray Capital Group did not really exist and has never 

been registered with the Commission in any capacity. 

13. HMC Trading, LLC (“HMC Trading”) is a limited liability company incorporated 

by Butkus, using the alias “Karpavicius,” in North Carolina on December 2, 2020.  The 

formation documents for HMC Trading list its principal place of business as 11010 Lake Grove 

Blvd, Suite 100-123, Morrisville, NC 27560.  That address is a private mailbox at a retail 

shipping store leased by Butkus under his alias, “Karpavicius.”  HMC Trading’s bank accounts 

received investor funds through the fraud.  Investors seeking to send their investment via wire or 

ACH transfer were instructed to transfer money to accounts in HMC Trading’s name.  Other 

investors made their investment via checks made out to HMC Trading.  Investors were instructed 

to mail their checks to TBO Capital Group’s New York address.  That address is a private 

mailbox at a retail shipping store leased by Butkus under his alias, “Karpavicius.”  Butkus 

arranged to have mail received at that mailbox forwarded to his Morrisville, NC private mailbox.  

HMC Trading is Butkus’s alter ego; it has no employees or infrastructure, was completely 

controlled by Butkus, and does not conduct any business separate from Defendants’ fraud.  

14. HMC Management, LLC (“HMC Management”) is a limited liability company 

incorporated by Butkus, using his alias “Karpavicius,” in South Carolina on March 22, 2022.  

Investors were instructed to transfer money to accounts in HMC Management’s name via wire or 

ACH transfer.  Other investors mailed their investment via check made out to HMC 

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Management.  HMC Management’s bank accounts received investor funds through the fraud.  

HMC Management is also Butkus’s alter ego; it has no employees or infrastructure, was 

completely controlled by Butkus, and does not conduct any business separate from Defendants’ 

fraud. 

RELIEF DEFENDANT 

15. DK Auto, LLC (“DK Auto”) is a limited liability company incorporated by 

Butkus, using his alias “Karpavicius,” in North Carolina on December 2, 2020.  DK Auto’s 

formation documents list its principal place of business as 11010 Lake Grove Blvd, Suite 100-

123, Morrisville, NC 27560.  That address is a private mailbox at a retail shipping store leased by 

Butkus, under his alias, “Karpavicius,”  Funds were transferred from HMC Defendants’ accounts 

to accounts in DK Auto’s name. 

FACTUAL ALLEGATIONS 

A. DEFENDANTS USED MATERIALLY FALSE AND MISLEADING 
STATEMENTS TO SOLICIT INVESTMENTS   
 
16. From at least December 2021 through at least March 2023, Defendants have 

solicited investors for non-existent mutual funds run by TBO Capital Group, and later Gray 

Capital Group.  On or around September 19, 2022, TBO Capital Group’s website was 

deactivated, most email addresses at tbocapital.com were deleted, and phone calls to numbers 

posted on the website went unanswered.  On or about this time, the website for Gray Capital 

Group went active.   

17. In many respects, TBO Capital Group’s and Gray Capital Group’s websites are 

duplicates.  The websites share similar layouts, graphics and logos as well as three of the same 

purported fund managers.  The websites list the same New York address and phone numbers.  

Both websites described the TBO Capital Group and Gray Capital Group employees as “highly 

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7 

experienced portfolio managers who possess over 20 years of experience in the industry.”  Both 

websites describe the Group as being “employee-owned,” with employees who “hold substantial 

personal capital” in the Group and whose “deferred cash compensation is directly linked to 

performance.”  In other locations, the websites claim that their “portfolio managers” have “25 

years of experience working asset management.”   

18. Defendants claimed TBO Capital Group was purportedly managed by four 

individuals: Andrew Taubman (CEO), Daniel Brown (CIO), David Freedman (Fund Manager) 

and John Olsen (FCFO).  Images of the four purported executives were positioned above links to 

entirely fictitious biographies available on a prominent social media website. 

 

19. According to Defendants, TBO Capital Group’s executives were also supported 

by “Long-tenured advisors of three PHDs and one MD in internal medicine.” 

20. Gray Capital Group’s website claimed that its fund is managed by three of the 

same four individuals purportedly managing TBO Capital Group, along with Alexandre Grande 

(Fund Manager).  Again, the website featured the same photos of those purported executives.     

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8 

 

21. Both websites used the same graphics to illustrate performance: for example, 

identical graphs (TBO Capital on the left, Gray Capital on the right) illustrated the purported 

performance of their mutual funds in comparison to the “MSCI ACWI Health Care 

(Benchmark).”   

  

22. Defendants’ websites contained numerous misrepresentations regarding the 

consistently high performance of their purported mutual funds.   

23. Although Defendants never made any investments, TBO Capital Group’s and 

Gray Capital Group’s websites falsely claimed that their mutual funds launched in 2015 and have 

since enjoyed a “50% + Average annual return for the last 5 years.”  Both websites described the 

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9 

mutual funds as “[o]ne of the Market’s Most Effective Diversification Strategies,” and claimed 

to “help-our clients achieve long-term positive returns on investments.”  The websites also 

described the purported mutual funds as “Industry-leading investment returns with a focus on 

risk management.” 

24. TBO Capital Group’s website also offered for download a seemingly detailed 

Annual Report, and a Fund Fact Sheet and Prospectus.  According to the Annual Report, TBO 

Capital Group had $126,769,226.16 in assets under management as of December 2020.  The 

Annual Report also included a breakdown of the mutual fund’s allocation, including 35.4% in 

Biotechnology, 21.1% in Health Care Equipment and Supplies, and 18.1% in Pharmaceuticals.  

The Annual Report showed the mutual fund’s entire portfolio as of December 31, 2020 and 

concluded with a fabricated “Report of Independent Registered Public Accounting Firm” from 

what appeared to be a legitimate accounting firm.  The fake report stated: “[t]he financial 

statements, in our opinion, fairly represent the Fund’s financial position, results of its operations, 

changes in net assets, and financial highlights of the periods audited in all material respects, in 

full accordance with the accounting standards required in the United States of America.” 

25. Gray Capital Group’s website claimed it had $150 million in total net assets.  It 

also purported to list the portfolio composition of its mutual fund with 44.7% in crypto assets, 

38.8% in Pharmaceuticals, and 20.3% in Biotechnology.  The website also listed the mutual 

funds supposed top holdings, which include various crypto assets, prominent pharmaceutical 

companies, and other publicly traded companies.  

26. TBO Capital Group’s website also promised the payment of monthly dividends, 

which could either be reinvested into an investor’s account or paid out monthly.  Gray Capital 

Group purported to offer daily, weekly, monthly, or yearly dividends. 

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10 

27. Defendants repeated similar materially false and misleading statements about the 

funds’ assets and performance in internet advertisements and at least one press release, 

attempting to lure potential investors to the TBO Capital website.  

28. More specifically, between January and May 2022, Butkus paid a well-known 

technology company (“Company A”) approximately $400,000 for online advertisements touting 

TBO Capital.  These advertisements included headlines such as “Best Returns Healthcare Fund,” 

“Over 60% APY,” and “Best Investment 2022,” and directed internet users to TBO Capital’s 

website.  Many TBO Capital investors learned of TBO Capital from these advertisements. 

29. Similarly, on February 14, 2022, in an apparent effort to drive more traffic to 

TBO Capital Group’s website, Butkus created an account with a news distribution service to 

have a press release distributed across multiple digital media outlets announcing that TBO 

Capital Group was “reducing the fees on all investment balances starting from the 1st of March 

2022.”  The press release went on to falsely describe TBO Capital Group as having “25 years of 

industry experience, plus an average annual rate of return of 50% in the last five years.”  

According to the press release, TBO Capital Group was managed by “highly experienced 

portfolio managers who possess over 20 years of experience in the industry.”   

B. BUTKUS OPERATED THE FRAUDULENT SCHEME 
 
30. TBO Capital Group’s and Gray Capital Group’s websites, through which 

Defendants perpetrated the fraud, provide the same phone numbers and street address.  

According to Defendants, TBO Capital Group and Gray Capital Group operated at the same 

address: 244 Madison Ave, Ste. 1149, New York, NY 10016.  While TBO Capital initially listed 

its phone numbers as (877) 839-3943 and (212) 710-5901, it later used the same numbers listed 

on the Gray Capital website:  (877) 839-3943 and (212) 796-6927.   

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11 

31. In reality, that address is a private mailbox at a retail shipping store at 244 

Madison Avenue.  Butkus personally secured the lease for this mailbox using his alias, 

“Karpavicius,” and a copy of his doctored Lithuanian passport.  He arranged for all mail received 

to be forward to a second mailbox he leased at 11010 Lake Grove Blvd, Suite 100-123, 

Morrisville, NC 27560.  

32. The (877) 839-3943 and (212) 710-5901 phone numbers were obtained by Butkus 

on or around December 2, 2021 from a company that provides toll free and phone forwarding 

services.  The account was initially opened under his alias, “Karpavicius,” though in September 

2022 he changed the account name to “kevin kevin.”  Butkus paid for these phone services using 

one of the HMC Trading bank accounts he controlled.  On February 10, 2022, Butkus logged 

into this phone services account from IP address 107.15.119.123 (“Butkus IP address 1”) to 

change the number to which calls were forwarded.  Butkus would later use this IP address to 

manage the fraudulent TBO Capital website and services supporting the website.   

33. On December 31, 2021, Butkus contacted Company A online to create the 

tbocapital.com email addresses [email protected], at 7:53:25 EST, and [email protected], at 

9:07:14 EST.  To create an email address, Company A required the user to provide their name, 

and Butkus provided his alias, “Karpavicius,” to create both addresses.  Butkus created the 

[email protected] email address from IP address 172.72.20.238 (“Butkus IP address 2”).  Less 

than two hours after being used to create the [email protected] email address, Butkus IP 

address 2 was used at 9:29:55 am EST to log into TBO Capital’s account at the company hosting 

its website.  The [email protected] email account was also accessed from Butkus IP address 1 

in March and April 2022.   

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12 

34. On or around January 13, 2022, using his tbo@tbocapital email account, Butkus 

created two accounts with Company A, an advertisement account and payment account.  Butkus 

used these accounts to post and pay nearly $400,000 for the internet advertisements described in 

paragraph 28 above.  Here, too, Butkus paid these bills using stolen investor funds held in one of 

the HMC Trading bank accounts he controlled.    

35. On or around January 19, 2022, using his [email protected] email address, 

Butkus opened an account with a company that provided a service preventing internet bots from 

clicking on the TBO Capital internet ads described in paragraph 28.  Butkus paid for these 

services using one of the HMC Trading bank accounts he controlled and later accessed the 

account from Butkus IP address 2.   

36. Similarly, Butkus created the account for the February 14, 2022 press release 

described in paragraph 29, using his [email protected] email address.  He paid for these 

services using stolen investor funds held in one of the HMC Trading bank accounts he 

controlled.   

37. TBO Capital Group’s website also featured a chat window where potential 

investors could communicate with TBO Capital as they made their investment decisions.  Butkus 

used his [email protected] email address to register for these services on or around February 

22, 2022 and provided the credit card number he used to pay for the services using Butkus IP 

address 1.  As before, Butkus paid for the services using stolen investor funds from one of the 

HMC Trading bank accounts he controlled.  Through the means described above, Butkus 

engaged in the scheme to defraud investors both individually and by doing business as TBO 

Capital Group and Gray Capital Group.   

 

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mailto:[email protected]
mailto:[email protected]


 

 
13 

C. DEFENDANTS USED THE MATERIALLY FALSE AND MISLEADING 
STATEMENTS AND OTHER DECEPTIVE CONDUCT TO STEAL MILLIONS 
FOR BUTKUS’S PERSONAL BENEFIT AND TO CONCEAL THEIR 
MISCONDUCT 
 
38. Defendants used the materially false and misleading statements outlined above to 

convince 64 retail investors to invest approximately $4.1 million in TBO Capital Group’s 

purported fund.  The vast majority of these assets were stolen for Butkus’s personal benefit while 

the remainder was used to perpetuate the fraudulent scheme.   

39. Prospective TBO Capital Group investors were instructed to first create an online 

account through the tbocapital.com website.  Once an investor’s account was created, 

Defendants provided instructions to either send funds electronically to accounts in the name of 

HMC Trading or HMC Management, or to mail checks made out to those entities to TBO 

Capital’s address in New York.  As noted, however, TBO Capital’s address was actually 

Butkus’s private mailbox at 244 Madison Ave, Ste. 1149, New York, NY 10016. 

40. To receive these investor assets, Butkus, using his alias “Karpavicius,” opened – 

and solely controlled – each of the HMC Defendants’ bank accounts.  More specifically, on each 

of March 23, 2021, March 24, 2021, March 30, 2021, November 5, 2021, and March 14, 2022, 

Butkus opened a bank account in the name of HMC Trading at five well-known banks.  Then, on 

April 15, 2022, Butkus opened an account for HMC Management with a sixth well-known bank.   

41. To create the appearance that the enterprise was legitimate and prevent investors 

from discovering their misconduct, Defendants deceptively fabricated online accounts for each 

TBO Capital investor.  The fake accounts purported to show the status of each investor’s 

investment.  For those investors that requested to have their dividends reinvested, dividends 

appeared to accrue monthly in their online accounts.  These dividends were completely fake 

because there was no mutual fund and no actual investments that could generate any returns.   

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14 

42. For those investors that requested to have their dividends paid on a monthly basis, 

Defendants either mailed the investors dividend checks drawn on the HMC Defendants’ bank 

accounts or wired them funds electronically from those accounts.  In total, approximately 11 

investors chose to receive monthly dividend payments and they received approximately $42,000 

during the course of the scheme.  Because Defendants did not actually operate any mutual funds, 

these dividend payments were actually Ponzi-like payments made from funds Defendants 

obtained from newer investors.  

43. The appearance, or receipt, of purported dividends prompted some investors to 

invest additional money and allowed Defendants’ scheme to continue undiscovered.   

44. Ultimately, of the approximately $4.1 million invested, Defendants stole 

approximately $3.6 million for Butkus’s personal benefit, including for groceries, restaurants, 

hotels, clothes, cash withdrawals, and crypto asset purchases.  The cash withdrawals and crypto 

asset purchases, in particular, demonstrate that Butkus was the mastermind, and the primary 

beneficiary of, the fraudulent scheme.  

45. Butkus withdrew approximately $350,000 of the investors’ funds in cash from 

various locations, including around the Morrisville, North Carolina area and Greer, South 

Carolina area.  On August 18, 2022, a security camera in a bank in Rock Hill, South Carolina 

captured him depositing a check worth $21,500 of stolen investor funds into, and withdrawing 

$8,000 in cash from, his personal bank account.  The image matches the photo in the doctored 

passport referenced in paragraph 31 above.   

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46. Similarly, the crypto asset trading platforms Butkus used to spirit away his ill-

gotten gains required him to provide a photograph of himself before completing his transactions.  

The redacted copy of one of these photos shown below matches the doctored passport photo and 

bank security image referenced in paragraphs 31 and 45, above, and also shows Butkus holding 

the doctored passport in his alias name, “Darius Karpavicius.” 

 

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47. On or about September 19, 2022, the TBO Capital Group website stopped 

working.  Calls to the phone numbers listed on the website went unanswered.  Email addresses 

listed on the website were deleted.  Investors lost access to their online TBO Capital Group 

accounts. 

48. In or around September 2022, the Gray Capital website became active and began 

offering securities to investors in an apparent attempt to continue the TBO Capital Group 

scheme.  In or around March 2023, the Gray Capital website was deactivated.     

D. DEFENDANTS VIOLATED THE FEDERAL SECURITIES LAWS 

49. The interests in the mutual fund offered and sold by the Defendants were 

securities within the meaning of the Securities Act and the Exchange Act. That the funds were 

fictitious does not change this fact.  The Defendants’ statements to investors are what control this 

analysis and Defendants unmistakably – though falsely – offered the investors an investment in a 

security.   

50. The Defendants said they would pool the investors’ assets into the Defendants’ 

accounts and represented that they would invest those funds in interest in the purported mutual 

fund managed by TBO Capital Group and return a profit.  The Defendants further stated that 

TBO Capital Group and its employees’ profits and earnings were directly tied to the performance 

of the TBO Capital Fund and thus tied to investors’ fortunes. 

51. Investors considered the interests in the Defendants’ mutual funds to be 

investments and were interested in the significant profits the funds were expected to generate that 

were touted by Defendants.  

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52. Defendants engaged in the conduct described herein, including the offer and/or 

sale of the interests in the TBO Capital Group fund and the offer of interests in the Gray Capital 

Group mutual funds, by use of the means or instruments of transportation or communication in 

interstate commerce, the instrumentalities of interstate commerce, and/or by use of the mails. 

53. Defendants solicited investments from investors via the internet and secured 

investments from investors in multiple states through the instrumentalities of interstate 

commerce.  

54. Defendants did not register their sale of interests in the mutual fund with the 

Commission as required by Section 5 of the Securities Act and the sales were not otherwise 

exempt from registration.  

55. From at least December 2021 through at least March 2023, the Defendants 

engaged in a long-running course of conduct designed to deceive investors in the offer and/or 

sale, in connection with the purchase and/or sale, of interests in their purported mutual funds.  

56. The Defendants initiated the fraud by using false websites, fabricated press 

releases, a false identity and doctored passport, and opened bank accounts with the sole purpose 

of misappropriating investor funds.  

57. The Defendants employed several deceptive acts to make the transactions appear 

as legitimate investments, including by creating bogus online accounts where they pretended to 

deposit dividend returns and mailing and wiring dividend payments to investors drawn from 

funds invested by other investors. 

58. Butkus, and thus the entity Defendants he solely controlled, knowingly made 

materially untrue statements designed to deceive investors.  For instance, Defendants falsely 

represented the identities – and existence – of the executives purportedly managing TBO Capital 

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Group and Gray Capital Group, the business operations and performance of those entities, and 

the use of investor funds.  

59. A reasonable investor would consider material the misrepresentations and 

omissions described herein including, among other things, misrepresentations and omissions 

regarding the high rate of returns on investment and the use of investors’ assets in deciding 

whether or not to purchase interests in Defendants’ purported mutual funds. 

60. In connection with the fraudulent conduct described herein, Defendants acted 

knowingly or recklessly.  Butkus, and thus the entity defendants he solely controlled, knew or 

were reckless in not knowing, that they were making material misrepresentations. 

61. Similarly, Defendants knew or were reckless in not knowing, that investor funds 

were not being used as promised.  

62. Defendants used devices, schemes, and artifices to defraud investors, and engaged 

in acts, transactions, practices, or coursers of business that operated as a fraud or deceit upon 

investors. 

63. In addition to the numerous misrepresentations discussed herein, among other 

things, Defendants misled investors and misappropriated investors’ funds for their personal use 

and benefit. 

 

 

 

 

 

 

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CLAIMS FOR RELIEF 
 

FIRST CLAIM FOR RELIEF 
Violations of Sections 5(a) and 5(c) of Securities Act 

(All Defendants) 
 

64. The Commission re-alleges and incorporates by reference herein paragraphs 1 

through 65.  

65. By virtue of the foregoing, without a registration statement in effect as to that 

security, Defendants, directly and indirectly, (a) made use of the means and instruments of 

transportation or communications in interstate commerce or of the mails to sell securities through 

the use or medium of any prospectus or otherwise; (b) carried or caused to be carried through the 

mails or in interstate commerce, by any means or instruments of transportation, any such security 

for the purpose of sale or for delivery after sale; and (c) made use of the means and instruments 

of transportation or communication in interstate commerce or of the mails to offer to sell through 

the use or medium of a prospectus or otherwise, securities as to which no registration statement 

had been filed. 

66. By reason of the conduct described above, Defendants, directly or indirectly, 

violated and unless restrained and enjoined, will continue to violate Securities Act Sections 5(a) 

and 5(c) [15 U.S.C. §§ 77e(a), (c)]. 

 

SECOND CLAIM FOR RELIEF 
Violation of Sections 17(a)(1), (2) and (3) of the Securities Act  

(All Defendants) 
 

67. The Commission re-alleges and incorporates by reference herein paragraphs 1 

through 65. 

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68. By reason of the conduct described above, Defendants, in connection with the 

offer or sale of securities, by the use of the means or instrumentalities of interstate commerce or 

of the mails, directly or indirectly, acting knowingly, recklessly, or, as to (ii) and (iii), 

negligently (i) employed devices, schemes, or artifices to defraud; (ii) obtained money or 

property by means of untrue statements of material facts and omissions to state material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading; and (iii) engaged in acts, practices, or courses of business which 

operated or would operate as a fraud or deceit upon any persons, including purchasers or sellers 

of the securities. 

69. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 

have violated, and unless enjoined will continue to violate, Sections 17(a)(1), (2) and (3) of the 

Securities Act [15 U.S.C. § 77q(a)(1), (2) and (3)]. 

 
THIRD CLAIM FOR RELIEF 

Violations of Exchange Act Section 10(b) and Rule 10b-5(a) and (c) thereunder  
(All Defendants) 

 
70. The Commission re-alleges and incorporates by reference herein paragraphs 1 

through 65.  

71. Defendants, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of means or instrumentalities of interstate 

commerce, or the mails, or the facilities of a national securities exchange, knowingly or 

recklessly have employed one or more devices, schemes, or artifices to defraud. 

72. Defendants, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of means or instrumentalities of interstate 

commerce, or the mails, or the facilities of a national securities exchange, knowingly or 

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recklessly have engaged in one or more acts, practices, or courses of business which operated or 

would operate as a fraud or deceit upon other persons.  

73. By reason of the foregoing, Defendants directly or indirectly, singly or in concert, 

have violated and, unless enjoined will continue to violate, Section 10(b) of the Exchange Act 

[15 U.S.C. § 78j(b)] and Rule 10b-5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a) and (c)].  

 
FOURTH CLAIM FOR RELIEF 

Violations of Exchange Act Section 10(b) and Rule 10b-5(b) thereunder  
(Defendant Butkus) 

 
74. The Commission re-alleges and incorporates by reference herein paragraphs 1 

through 65.  

75. Defendant Butkus, also known as “Darius Karpavicius,” individually and doing 

business as TBO Capital, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of means or instrumentalities of interstate 

commerce, or the mails, or the facilities of a national securities exchange, knowingly or 

recklessly made one or more untrue statements of a material fact or omitted to state one or more 

material facts necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading. By reason of the foregoing, Defendant Butkus, 

directly or indirectly, singly or in concert, has violated and, unless enjoined will continue to 

violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5(b) thereunder 

[17 C.F.R. §§ 240.10b-5(b)].  

 

 

 

 

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FIFTH CLAIM FOR RELIEF 
Unjust Enrichment 

(Relief Defendant DK Auto, LLC) 
 

76. The Commission re-alleges and incorporates by reference herein paragraphs 1 

through 65.  

77. DK Auto, LLC, received funds or assets, which are proceeds of the unlawful 

activity alleged above.   

78. DK Auto, LLC has no legitimate claims to such funds, assets, and/or property 

received and it is not just, equitable, or conscionable for the Relief Defendant to retain the funds.   

79. DK Auto, LLC was unjustly enriched as a result of Defendants’ fraud and the 

Commission is entitled to an order, pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C.  

78 § u(d)(5)], requiring DK Auto, LLC to disgorge all of the funds, assets or property it received 

from Defendants that were derived from the illegal activities described above.   

 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully requests that the Court enter a final 

judgment: 

I. 

Finding of Liability 

 Finding the Defendants liable for the violations alleged herein.  

II. 

Injunction 

 In a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, 

permanently restraining and enjoining Defendants, their agents, servants, employees, and 

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attorneys and all persons in active concert or participation with any of them from violating 

Securities Act Sections 5(a) and (c) and 17(a) [15 U.S.C. §§77e(a) and (c) and 77q(a)], Exchange 

Act Section 10(b) [15 U.S.C. §78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];  

III. 

Disgorgement and Prejudgment Interest 

 Ordering Defendants to disgorge on a joint and several basis the ill-gotten gains and/or 

unjust enrichment they received directly or indirectly as a result of the violations alleged here 

and to pay prejudgment interest thereon pursuant to Exchange Act Sections 21(d)(3), 21(d)(5) 

and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)], and order Relief Defendant to 

disgorge the ill-gotten gains and/or unjust enrichment it received, together with prejudgment 

interest thereon. 

IV. 

Civil Penalty 

 Ordering Defendants to pay civil money penalties pursuant to Securities 

Act Section 20(d) [15 U.S.C. § 77t(d)], and Exchange Act Section 21(d)(3) [15 U.S.C. § 

78u(d)(3)]; and 

V. 

Further Relief 

 Granting any other and further relief this Court may deem just and proper for the benefit 

of investors.  

 

 

 

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VI. 

Demand for Jury Trial 

 Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the Commission hereby 

demands a trial by jury on any and all issues in this action so triable. 

 

Dated: February 27, 2025 
  

 

Respectfully submitted, 
             
       /s/ Peter Lallas    

      Peter Lallas (PL-2965) 
Katherine Stella (KS-1004) 
Benjamin Vaughn (pro hac vice application forthcoming)  
[email protected] 
[email protected] 

      [email protected] 
      (202) 551-6864 (Lallas) 
      (202) 551-2113 (Stella) 
      (202) 551-4848 (Vaughn) 
      Attorneys for Plaintiff 
      SECURITIES AND EXCHANGE COMMISSION 
      100 F. Street, NE 
      Washington D.C. 20549 

 

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