Recently, US authorities extradited from Panama the co-founder of a significant crypto Ponzi scheme AirBit Club, Gutemberg Dos Santos. He and his partners allegedly plucked their victims with about $20 million. Operators of the crypto fraud ran incorrect advertisements, promising users significant rewards from Bitcoin trading and mining.
Central District Court in California sentenced GemCoin founder Steve Chen to 10 years in federal jail. Chen has been revealed guilty of being the mastermind and leader of a $147 million crypto Ponzi plan that involved mining and digital currency scams, and tax evasion.
Over 70,000 Investors Defrauded with Gemstone-backed Crypto
According to the US Department of Justice, 63-year-old Californian Steve Chen and a group of conspirators have masterminded the fraudulent venture that stayed active for 2 years– from July 2013 to September 2015. It was among the earliest recorded crypto Ponzi schemes..
Chen was the owner and CEO of Fine Investment Arts, Inc. (USFIA), provided to his customers as a multi-level marketing business that drew out amber and other gems from non-existing mines it owned in the United States, the Dominican Republic, Argentina, and Mexico.
Following, Chen got about $147 million from 72,000 victims by promising that their gems holdings back GemCoin tokens, hence marking one of the largest Ponzi schemes ever to face district court.
The fraudulent plan utilized well-known marketing bait, motivating investors to recruit others. In return, they would get settlement, including money, travel expenses, high-end vehicles, estates in the Los Angeles area, and EB-5 visas for immigrant investors.
” Because the main focus was on recruiting other financiers, rather than offering USFIA products to retail customers, the huge majority of investors were destined to lose money– while making [Chen] extremely rich,” checks out the official declaration.
Drawn investors have reportedly gotten in the plan with initial payments in between $1,000 and $30,000 each.
Criminal Activity and Cryptocurrency Keep Getting Along?
The courts statement reads that Chen has actually accepted pay a $1,885,094 restitution to the IRS on the tax evasion count. A district judge has arranged a restitution hearing for USFIA victim financiers on July 16.
The most current Ponzi scheme is far from being the only one since bad stars think about cryptocurrencies a simple way to deceive their victims worldwide, camouflaging their strategies as financial investment opportunities..
Recently, US authorities extradited from Panama the co-founder of a significant crypto Ponzi plan AirBit Club, Gutemberg Dos Santos. He and his partners supposedly plucked their victims with about $20 million. Operators of the crypto scams ran false advertisements, promising users significant benefits from Bitcoin trading and mining.
However, while cryptocurrencies and crime are still getting along, current data from CipherTrace reads that mainstream crypto thefts, hacker attacks, and frauds have actually reduced by 60% on account of Defi criminal offenses, which have increased significantly compared to 2019.
As CryptoPotato reported recently, international cybersecurity and anti-virus provider Kaspersky cautioned that crypto and BTC-related criminal offenses might get back at more attention from bad actors since of the high cost of BTC and other digital possessions.
Title: Founder of a $147M Crypto Ponzi Scheme Sentenced to 10 Years in Prison.
Sourced From: cryptopotato.com/founder-of-a-147m-crypto-ponzi-scheme-sentenced-to-10-years-in-prison/.
Published Date: Tue, 12 Jan 2021 13:04:01 +0000.
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