On Tuesday, the Justice Department made an announcement regarding the arrest of three men involved in an alleged fraud that led to the embezzlement of a whopping amount of $722 million from the investors via fake bitcoin mining earnings.
According to the latest reports, the prosecutors have recognized and addressed the fraudulent activity as a “high-tech Ponzi scheme” operated by the “BitClub Network.” The scammers pooled in money from the investors and rewarded them for bringing in new shareholders.
The statement also revealed that the malicious activity was run by the fraudsters for a long period from April 2014 to December 2019 when finally, the authorities unveiled their scam in public. All this time, the group gathered a team of unsuspecting investors by luring them with illicit earnings claimed to have earned from the group’s mining pool.
An indictment signed by US Attorney Craig Carpenito of New Jersey affirmed that the fraud scheme was operated from Passaic, New Jersey, but was aimed to work as a “worldwide fraudulent scheme.”
The Justice Department stated that the defendant Matthew Brent Goettsche addressed the investors as “dumb” during a conversation with his other team members. The head scammer mocked that he was “building the whole model on the backs of idiots” while he ordered his accomplices to manipulate the data and figures.
Paul Delacourt, the assistant director at the FBI’s Los Angeles office, stated that the defendants “are accused of deploying elaborate tactics to lure thousands of victims with promises of large returns on their investments in a bitcoin mining pool.”
The Justice Department has accused and held Goettsche and Jobadiah Sinclair Weeks for channelizing a conspiracy to commit a well-planned fraud. Along with Joseph Frank Abel of California, Goettsche and Sinclair were charged for dealing in unregistered securities.
The officials of the Justice Department stated that the group involved two other defendants as well, and their identities are being kept hidden.