Cryptocurrency Ponzi scheme results in indictments

On Behalf of | Oct 5, 2020 | White Collar Crimes |

Five individuals are the target of indictments in New York due to what prosecutors say is their role in a Ponzi scheme. The indictment presented in the state’s Southern District alleges that the group put a modern twist on the scheme by using a fictitious cryptocurrency trading and mining company to trick investors out of their money.

The alleged white-collar crime began with the introduction of the Airbit Club. The group explained the opportunity to investors as a multilevel marketing club for cryptocurrency. The scam reportedly involved a promise of profits to investors who purchased memberships in the club.

According to prosecutors, false claims by promoters included assertions that membership owners would enjoy passive returns on the cost of memberships. This money was said to be possible as a result of the profits that club members would share from cryptocurrency investments. The company recruited investors by hosting events throughout the United States and other countries in Asia, Latin America and Eastern Europe.

The elaborate scheme included the creation of an online portal that could be accessed by members who wanted to track their earnings. The problem is that these earnings reports were from phantom investments, and Airbit Club reportedly never participated in any type of cryptocurrency investing for the benefit of the people who purchased memberships.

The group is said to have covered their tracks by asking the individuals purchasing memberships to do so only with cash. The members of the group allegedly laundered the money through several financial institutions before using it for their purposes.

Club members attempting money withdrawals encountered error messages and delays. When one of them was able to withdraw earnings, they learned that they had to pay fees as high as 50%.

The group reportedly defrauded investors of more than $20 million. The group faces charges of conspiracy to commit bank and wire fraud. A third conspiracy charge for money laundering is also among the list of crimes alleged by the prosecutors.

Charges involving white-collar crimes can result in damage to both the private and professional life of an accused individual. A criminal defense attorney may be able to assist business owners and government officials accused of abusing their positions for financial gain.

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