3 people have been detained for $722 million cryptocurrency ‘Ponzi scam’ allegedly targeting ‘stupid’ investors

U.S. Attorney Craig Carpenito stated today that three men were detained in connection with a ponzi scam cryptocurrency mining operation that defrauded investors of $722 million.

3 of 5 arrested in crypto fraud

Indictments have been filed against Matthew Brent Goettsche, 37, of Lafayette, Colorado, and Jobadiah Sinclair Weeks, 38, of Arvada, Colorado, for conspiracy to commit wire fraud, as well as Goettsche, Weeks, and Joseph Frank Abel, 49, of Camarillo, California, for conspiracy to offer and sell unregistered securities. Goettsche, Weeks, and Abel were all arrested in Colorado, Florida, and California, respectively. All three are due to appear in court in the districts where they were arrested. Two defendants are still on the loose, and their identities are kept under wraps.

“The indictment details the defendants’ use of the complicated world of cryptocurrencies to defraud naive investors,” said US Attorney Carpenito. “What they reportedly accomplished was little more than a modern, high-tech Ponzi scheme that scammed hundreds of millions of dollars from victims.” We will ensure that these scammers are held accountable for their crimes by working with our law enforcement colleagues locally and around the country.”

The defendants gained hundreds of millions of dollars over several years

“Those detained today are suspected of using sophisticated tactics to entice hundreds of victims into investing in a bitcoin mining pool, an advanced method of earning from cryptocurrencies,” stated Paul Delacourt, Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The defendants reportedly gained hundreds of millions of dollars over several years by continuing to recruit new investors while lavishly squandering the money of the victims.”

Accused travelled across the country to promote BitClub Network

Prosecutors believe that Goettsche, Weeks, and others collaborated to solicit investments by giving fraudulent and deceptive numbers labelled “bitcoin mining revenues.” According to prosecutors, Weeks and a fourth man, Joseph Frank Abel, 49, of Camarillo, California, made films and travelled across the country and the world to promote BitClub Network, calling it “the most transparent company in the history of the world that I’ve ever seen” and “too large to fail.”

Prosecutors say they appeared to combine greed, scorn for their investors, and uncertainty about the scheme’s long-term viability behind the scenes.

If convicted…

On the fraud conspiracy charge, the defendants face a potential sentence of 20 years in prison and fines of up to $250,000 if convicted. Conspiracy to sell unregistered securities carries a maximum punishment of five years in prison and a fine of $250,000.

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