The U.S. DOJ has charged the CFO of a media company with one count of money laundering and two counts of bank fraud for participating in a scheme that laundered criminal proceeds using cryptocurrency. Authorities allege that Weidong Guan and his accomplices used bank accounts opened with stolen personal identification information to transfer the funds […]
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Crypto Exchange Kucoin and Founders Charged With Bank Secrecy Act and Money Laundering Violations
The Southern District of New York has announced charges against the global cryptocurrency exchange Kucoin and its founders for major violations of U.S. anti-money laundering laws. Kucoin Faces Legal Firestorm for Alleged Anti-Money Laundering Failures Damian Williams, the United States Attorney for the Southern District of New York, detailed the charges against Kucoin, accusing the […]
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Hawaii Man Charged for Making False Security Fund Conversion to Crypto Claims
The U.S. Securities and Exchange Commission has charged a Hawaiian resident for falsely claiming that his fraudulent security would become the “first publicly traded security fund to convert to a cryptocurrency.” According to the Commission, the man promoted the security to boost its price and bolster the value of his portfolio.
Fabricated Documents Used to Perpetrate the Fraud
The U.S. Securities and Exchange Commission (SEC) has charged a Hawaiian resident Jeremy Koski for allegedly fabricating and posting fake documents about a purported security that he said would become the “first publicly traded security fund to convert to a cryptocurrency.” The SEC also accused Koski of falsely claiming that the conversion would “allow the fund to recover the face value of as it opens up to a new world of digitized currency.”
According to the Commission’s Sept. 1 press release, the SEC has since formally charged Koski with “violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.” The SEC said it is seeking a permanent injunction against future violations.
Explaining how Koski perpetrated the fraud, the SEC alleged that the Hawaii resident had used internet message boards and different usernames to promote the fake documents. Koski’s objective according to the Commission was to not only boost the price of the security that used the symbol COTRP but bolster the value of his portfolio.
To support these allegations, the SEC claimed that after Koski posted a notice in May 2021 stating that the “JCP debentures would be redeemed early at their full value,” the price of the security went up by 75%. According to the SEC, Koski was aware that his statements were false.
What are your thoughts on this story? Let us know what you think in the comments section below.
Betrayal In Blue: Former NJ Officer Charged With Crypto Fraud
In a major development, the US Securities and Exchange Commission (SEC) has charged former New Jersey State Correctional Police Officer, John A. DeSalvo, for allegedly orchestrating a fraudulent crypto fraud scheme that specifically targeted law enforcement personnel.
DeSalvo stands accused of raising funds through the unregistered offering of the Blazar Token, a crypto asset he created, which eventually collapsed in May 2022.
The SEC’s complaint further alleges misappropriation of investor funds, including diverting substantial amounts to his crypto asset wallets and using them for personal expenses, such as a bathroom renovation.
Crypto Scam Targeting Cops?
According to the SEC, DeSalvo managed to raise a minimum of 0,000 from around 220 investors between the launch of the Blazar Token in November 2021 and its subsequent collapse.
The complaint reveals that DeSalvo made “false claims” to investors, stating that the Blazar Token was registered with the SEC and that it would replace existing state pension systems. He further “deceived” investors by falsely assuring them that automatic payroll deductions would facilitate their investment and guarantee extraordinary returns.
Ultimately, DeSalvo allegedly misused and misappropriated the funds entrusted to him. Notably, the SEC’s complaint highlights DeSalvo’s deliberate targeting of fellow law enforcement and first responders in his fraudulent schemes.
In addition to the Blazar Token scheme, the SEC’s complaint also exposes an earlier fraud initiated by DeSalvo. Beginning in late January 2021, he allegedly solicited investors, primarily through social media, for an investment venture that involved trading stocks, options, and crypto asset securities.
Within weeks of raising ,000 from 17 investors, DeSalvo reportedly lost a significant portion of the funds through speculative investments and misappropriated the rest. He proceeded to inform investors that poor market conditions led to the complete devaluation of the securities.
SEC Accuses Former Officer Of Exploiting Trust
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, condemned DeSalvo’s actions, stating:
We allege that DeSalvo orchestrated several fraudulent investment schemes that targeted law enforcement personnel and promised astronomical returns, including one involving a crypto asset security that would somehow replace traditional state pension systems. Rather than producing any returns or revolutionary technology, he instead misappropriated and misused investor money.
Grewal further emphasized the breach of trust perpetrated by DeSalvo, who “exploited” his former position as a corrections officer to gain the confidence of fellow law enforcement professionals, many of whom invested their “hard-earned” savings with him.
The SEC’s complaint, filed in the U.S. District Court for the District of New Jersey, charges DeSalvo with violating antifraud and offering registration provisions of the securities laws. The SEC seeks injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and imposition of civil penalties.
Simultaneously, the U.S. Attorney’s Office for the District of New Jersey has announced criminal charges against DeSalvo, further underscoring the severity of the allegations and the commitment to holding him accountable for his actions.
At the time of writing, Bitcoin (BTC) maintains its upward trajectory in price, currently trading at ,700, reflecting a notable increase of over 3% within the past 24 hours.
Featured image from iStock, chart from TradingView.com
Aussie Crypto Scammers Charged in $5.5 Million Fraud Case, $600K Ferrari Among Seized Luxury Vehicles
Authorities in Australia have charged two individuals accused of operating a cryptocurrency scam that defrauded two companies of .5 million. Luxury vehicles worth .7 million including a 0,000 Ferrari have been seized by law enforcement.
Ferrari Seized From Car Dealer
Australian authorities have charged two alleged masterminds of a cryptocurrency scam that defrauded .5 million from two unnamed companies, a report has said. One of the men, Fabio Sa Alves, was arrested on June 16 in Sydney, and a day later, 6 luxury and classic vehicles, 11 motorcycles, cryptocurrency wallets, and designer watches were confiscated.
According to a local report, law enforcement agencies have seized luxury vehicles valued at .7 million, including a Ferrari worth 0,000 taken from a car dealer in Marrickville. Australian law enforcement said Alves used the crypto scam to steal from the two companies in 2021. His accomplice, an unnamed 67-year-old, is accused of authorizing the funds and hiding the Ferrari.
Residents Told to Deal With Approved Exchanges Only
For his actions, Alves has been charged with three counts of “dishonestly obtaining financial advantage by deception” and for attempting to conceal the stolen funds. A court in Parramatta has since rejected Alves’ bail application and his next appearance is set for Aug. 24. However, Alves’ accomplice was granted bail by a court in Manly.
Meanwhile, Gordon Arbinja, the Financial Crimes Squad Commander Detective Superintendent, told residents looking to invest in digital assets to work with approved crypto platforms.
“When buying or selling crypto, make sure you use a digital currency exchange that is approved by AUSTRAC and always scrutinise all the details,” Arbinja reportedly said.
What are your thoughts on this story? Let us know what you think in the comments section below.
Two Russians Charged for Infiltrating Mt Gox and Operating Illicit Crypto Exchange, BTC-e
In a statement issued on Friday, the U.S. Department of Justice (DOJ) revealed that two Russian individuals have been accused of infiltrating a cryptocurrency exchange and running an unlawful exchange. Reportedly, the pair gained unauthorized access to Mt Gox’s servers from 2011 to 2014 and purportedly pilfered 647,000 bitcoins from the now-dissolved exchange.
Russian Duo Accused of Orchestrating Mt Gox Heist and Operating Underground Crypto Exchange
The U.S. government has charged two Russians for breaching Mt Gox and managing the former crypto exchange BTC-e. The defendants, Alexey Bilyuchenko and Aleksandr Verner, are believed by authorities to have collaborated with Alexander Vinnik in running BTC-e.
As stated in the indictment, “As alleged in the indictments, starting in 2011, Bilyuchenko and Verner stole a massive amount of cryptocurrency from Mt Gox, contributing to the exchange’s ultimate insolvency. Armed with the ill-gotten gains from Mt Gox, Bilyuchenko allegedly went on to help set up the notorious BTC-e virtual currency exchange, which laundered funds for cyber criminals worldwide,” remarked Kenneth Polite Jr., the assistant attorney general of the Justice Department’s Criminal Division.
A 2016 indictment was unveiled alongside the press release, revealing more details about the relationship between Mt Gox and BTC-e. The indictment alleges that “Bilyuchenko, Verner, and their co-conspirators” initially accessed Mt Gox in September 2011 and managed to siphon funds from its wallets. “From September 2011 through at least May 2014, Bilyuchenko, Verner, and their co-conspirators allegedly caused the theft of at least approximately 647,000 bitcoins from Mt Gox,” asserts the DOJ.
BTC-e, Alexander Vinnik, and Russian nationals have all been implicated in hypotheses surrounding Mt Gox’s demise long ago. In 2019, reports stated that Russian attorney Alexander Zheleznikov from ZP Legal alleged his firm was aware of who the Russian nationals were and tied Mt Gox to the operators of BTC-e. In their latest discovery, the DOJ claims that the pair worked with an unnamed bitcoin brokerage service, referring to it as the “New York Bitcoin Broker” in the indictment.
A fabricated advertising agreement was allegedly concocted between Bilyuchenko, Verner, and the New York Bitcoin Broker to camouflage and liquidate bitcoins taken from Mt Gox. “Bilyuchenko and Verner supposedly made regular requests to the owner and operator of the New York Bitcoin Broker to transfer large sums into various offshore bank accounts, including those under the names of shell corporations managed by Bilyuchenko, Verner, and their co-conspirators,” details the DOJ’s charges and unveiled court indictment.
What do you think about the DOJ’s charges against the two Russian nationals? Share your thoughts and opinions about this subject in the comments section below.
Report: Terraform Labs Co-Founder Do Kwon Charged by Montenegro Prosecutors
Nearly a month after Do Kwon’s arrest by Montenegro law enforcement, local prosecutors have now indicted the co-founder and CEO of Terraform Labs. The decision to indict Kwon is likely to delay attempts to extradite him to South Korea and the United States where he faces several charges. Local prosecutors have reportedly asked a court to extend Kwon and his associate’s detention.
Kwon’s Hideout Seized by Local Law Enforcement
Prosecutors in Montenegro have reportedly hit Terraform Labs co-founder and CEO Do Kwon with charges of using a fake passport and other identification documents when he attempted to flee the Balkan state on March 23, 2023. According to a DL News report, Kwon’s indictment is likely to complicate efforts to extradite him to the U.S. and South Korea where he faces multiple charges.
As previously reported by Bitcoin.com News, Kwon and his associate Han Chang-Joon were arrested while attempting to leave for Dubai via a private jet. At the time of his arrest, Kwon was reportedly found in possession of a fake Costa Rican passport.
Before attempting to leave Montenegro, Kwon and Han lived in a Belgrade apartment that was acquired for about .2 million by the latter in Sept. 2022. According to local media reports, the apartment where Kwon is thought to have been holed up for six months was recently seized by local law enforcement.
Prosecutors Seek Extension of Kwon’s Detention
Following the two men’s capture by local law enforcement, a Montenegro court initially ruled that the duo should remain behind bars for 30 days. However, as noted in the DL News report, more days are likely to be added if the court gives in to the prosecutors’ demand for an extension.
“After the decision on the extension of detention by the court, the public will be informed about all available information regarding this case,” Maja Kosovic, a spokesperson of the court reportedly said.
According to the report, if Kwon and Han are convicted, they are likely to be handed prison terms that range between three months and five years.
What are your thoughts on this story? Let us know what you think in the comments section below.
Former Deutsche Bank Investment Banker Charged With Crypto Fraud in US
An investment banker formerly employed by Deutsche Bank has been charged with perpetrating a crypto-related fraud. The man from Brooklyn has been accused of misappropriating funds from victims whom he promised large returns on cryptocurrency investments in a Ponzi-like scheme.
Ex-Deutsche Bank Investment Banker Arrested and Charged for Defrauding Crypto Investors
Rashawn Russell, a 27-year-old investment banker and registered broker from Brooklyn, New York, was arrested on April 10 on criminal charges related to his alleged role in running a crypto investment fraud scheme, the U.S. Department of Justice announced on Tuesday.
Prosecutors claim that Russel defrauded multiple investors, luring them with promises of big and even guaranteed returns from cryptocurrency investment and trading. However, he used their money for his own benefit, to gamble and to repay other investors in order to keep the scheme going.
The indictment alleges that the accused repeatedly failed to provide investors with the promised rates of return. And when some of them requested to be repaid their investments, he falsely represented that he had wired them the money.
While the document only mentions he worked as an investment banker between July 2018 and November 2021, Reuters reported that Russel became investment banking analyst at Deutsche Bank in July 2018 and was promoted to associate in July 2020.
Declining to comment specifically on an ongoing legal case, the bank stated through a spokesperson that it “regularly supports law enforcement and regulatory oversight efforts, including appropriately responding to and cooperating with authorized investigations and proceedings.”
Russell solicited investments from friends, former classmates and colleagues, whom he convinced he had developed a successful strategy for altcoin trading, Bloomberg detailed in a report. He is charged with one count of wire fraud and would face up to 20 years in prison, if convicted. The banker pleaded not guilty and was released on a 0,000 bail.
“Russell turned the demand for cryptocurrency investments into a scheme to defraud numerous investors in order to fund his lifestyle,” U.S. Attorney for the Eastern District of New York Breon Peace was quoted as stating.
“This Office will continue to aggressively pursue fraudsters perpetrating these schemes against investors in the digital asset markets,” he emphasized. Russel’s indictment comes amid an ongoing crackdown on crypto-related fraud in the United States.
Do you think U.S. prosecutors and regulators will intensify the crackdown on crypto investment fraud schemes? Share your thoughts on the subject in the comments section below.
Onecoin Head of Legal and Compliance Charged for Role in Crypto Pyramid
Authorities in the U.S. have announced charges against a former Onecoin executive for her alleged role in the notorious crypto pyramid scheme. Bulgarian national Irina Dilkinska, who was extradited on Monday, may face up to four decades in prison if found guilty on counts of fraud and money laundering.
Bulgarian Woman Handed Over to US to Face Charges Related to Onecoin
Judicial and law enforcement officials in the U.S. have pressed charges against a 41-year-old woman in connection with her participation in Onecoin, one of the largest scams in crypto history. Irina Dilkinska was extradited from Bulgaria, where the massive crypto Ponzi scheme was based.
Established in 2014, Onecoin offered investors a fake cryptocurrency by the same name, branded as ‘the Bitcoin killer’ at a point, through a global multi-level-marketing network. According to Onecoin’s own materials, more than 3 million people invested over billion in the purported crypto by late 2016.
Dilkinska was the supposed head of legal and compliance at Onecoin, according to an announcement published by the U.S. Justice Department on Tuesday. Authorities claim that in reality the woman accomplished the exact opposite of her job title.
She is accused of enabling Onecoin to launder millions of U.S. dollars through shell firms. “As alleged in the charges unsealed today, Dilkinska helped her co-conspirator, Mark Scott, launder approximately 0 million in Onecoin proceeds,” FBI Assistant Director Michael J. Driscoll noted.
Companies created by the Bulgarian national were also used to hold property on behalf of Onecoin founder and mastermind Ruja Ignatova, a Bulgarian-born German citizen. The latter was last seen boarding an Athens-bound flight in Sofia, on Oct. 25, 2017.
Pyramid’s Founder ‘Cryptoqueen’ Ruja Ignatova Still Wanted
Dubbed ‘the missing Cryptoqueen,’ Ignatova disappeared less than two weeks after she was charged with fraud and money laundering in the U.S. District Court for the Southern District of New York. She is still wanted by Interpol, Europol, and the U.S. Federal Bureau of Investigation (FBI), with a recent Bulgarian media report suggesting she might have been murdered in 2018.
Irina Dilkinska has been charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Each of them carries a maximum potential sentence of 20 years in prison.
She is accused of burning incriminating documents after Scott’s arrest in 2018, about which she texted Ruja’s brother, Konstantin. Ignatov was detained in Los Angeles in 2019, pleaded guilty to Onecoin-related charges, and sought witness protection in the United States.
Another Onecoin co-founder, Swedish and British national Karl Sebastian Greenwood, pleaded guilty in December, 2022. Last month, a report revealed that Ruja’s ex-boyfriend, Gilbert Armenta, has been sentenced to five years in prison for his role in laundering proceeds from the crypto Pyramid.
Do you expect more people to face charges related to the Onecoin case? Tell us in the comments section below.
NBA Hall of Famer Paul Pierce Charged by SEC for Touting EMAX Tokens
The U.S. Securities and Exchange Commission (SEC) has charged Basketball Hall of Famer Paul Pierce for touting EMAX tokens and making misleading comments about unregistered crypto securities. The former Boston Celtics small forward agreed to settle the charges and pay the SEC .409 million.
SEC Chair Gary Gensler Wants to Remind Celebrities of Disclosure Laws
The U.S.’s top securities regulator has charged former Boston Celtics forward Paul Pierce for unlawfully touting the cryptocurrency project called Ethereummax and the token EMAX. The Securities and Exchange Commission’s charges against Pierce follow an onslaught of enforcement actions by U.S. regulators against staking services, earn programs, stablecoins, and Do Kwon’s Terra blockchain ecosystem. According to the SEC complaint, Pierce “failed to disclose that he was paid more than 4,000 worth of EMAX tokens to promote the tokens on Twitter.”
Pierce agreed to settle the charges with the SEC for .409 million in penalties, disgorgement, and interest. The complaint further asserts that in one tweet, Pierce shared a screenshot of profits that were much lower than his personal holdings. Another tweet shared the Ethereummax project’s website, which led to a portal to purchase EMAX tokens. Pierce is not the only celebrity whom the SEC has fined for unlawfully touting and misleading investors with the Ethereummax project and associated tokens.
In Oct. 2022, socialite Kim Kardashian was charged with unlawfully promoting the crypto asset EMAX. At the time, Kardashian also settled with the SEC for .26 million in penalties. In a statement concerning Pierce’s charges, SEC chair Gary Gensler insisted the case is “yet another reminder to celebrities.” Gensler continued, “The law requires you to disclose to the public from whom and how much you are getting paid to promote investment in securities, and you can’t lie to investors when you tout a security.”
The regulator added:
When celebrities endorse investment opportunities, including crypto asset securities, investors should be careful to research if the investments are right for them, and they should know why celebrities are making those endorsements.
The SEC’s charges note that the Basketball Hall of Famer violated the anti-touting and antifraud provisions of federal securities laws. The basketball star settled with the SEC on a non-admit or deny basis and promised not to promote any crypto assets for three years. The SEC further reminded investors to watch Gensler’s video about not making investments “solely on the recommendations of a celebrity or influencer.”
What are your thoughts on the SEC’s recent enforcement actions against celebrities promoting crypto assets and the alleged need for full disclosure to the public? Share your thoughts in the comments section below.