Three Men Arrested for Alleged $720 Million Scam
Authorities in the state of New Jersey have announced the arrest of three men who are accused of defrauding investors of more than $722 million as part of an alleged crypto Ponzi scheme named the BitClub Network, according to an announcement by the Justice Department from Dec. 10.
According to the press release, BitClub Network promised huge return rates in exchange for investments in a shared pool for cryptocurrency mining. The accused however allegedly missused over $722 million of these funds to maintain their own lavish lifestyles.
They attracted more investments by falsifying information about the returns, as stated by the authorities.
The three defendants are Matthew Goetsche and Jobadia Weeks – both from Colorado – and Joseph Abel from California.
Authorities charged the first two with conspiracy to commit fraud, which carries a maximum sentence of 20 years in prison, and conspiracy to offer and sell unregistered securities.
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Abel, who was apparently less “central” to the scheme, was charged only with conspiracy to offer and sell unregistered securities, carrying a possible maximum sentence of five years.