Five men were charged in New Jersey in connection to a lucrative cryptocurrency scheme.
What We Know:
- Five men were charged in connection with what federal prosecutors called a lucrative cryptocurrency scheme that fleeced investors out of $722 million. The business model was described by one of the defendants as built “on the backs of idiots”.
- The 27-page indictment, unsealed in United States District Court in Newark, New Jersey, named Matthew Brent Goettsche, Jobadiah Sinclair Weeks, Joseph Frank Abel and Silviu Balaci as part of a conspiracy to commit wire fraud. The men were also charged with conspiracy to offer and sell unregistered securities.
- Prosecutors alleged that “BitClub Network”, which operated from April 2014 to this month, was built on soliciting money from individuals in exchange for shares of purported cryptocurrency mining pools and on rewarding investors for bringing in new clients. The group did not register shares sold with the U.S. Securities and Exchange Commission.
- If convicted, the defendants face maximum penalties of 20 years in prison and fines of up to $250,000 on the fraud conspiracy count. The charge of conspiracy to sell unregistered securities carries a maximum sentence of five years with a $250,000 fine.
Four of the men were scheduled to make court appearances. Authorities are seeking a fifth man, whose identity was redacted pending his arrest.
