A cryptocurrency scammer is finally being brought to justice, and being made to pay back his victims. James Matthew Thomas, of Midland, Michigan, has been ordered to pay back $208,718 to victims who were duped into thinking they had perhaps invested in CoinPoint, reports the Great Falls Tribune.
Thomas, 35, pleaded guilty in October to wire fraud and money lending charges. These charges originated from Thomas’ scheme to convince victims he worked for CoinPoint, and was seeking investors for the company. He promised returns of 30% to 40% in just a few days’ time.
An individual named in court as Victim 1 sent Thomas $6,948 in cryptocurrency. Thomas then returned a roughly 30% return, as promised, in the amount of $9,203. This got Victim 1 excited, recruiting a second victim, family and friends to invest more. Altogether, another $685,000 was sent to Thomas for new investments.
When Victim 1 contacted Thomas to check up on the new investments at a coinpointpartners.net email address, Thomas replied that the funds were doing well. Victim 1 even received emails from other supposed CoinPoint employees.
Of course, CoinPoint was never involved in this scam. When asked to comment, Oron Barber, CEO and Founder of CoinPoint, responded:
“On behalf of CoinPoint I would like to point out that we have absolutely nothing to do with the person mentioned in this story and were first informed about it during the investigation.
“CoinPoint as the biggest leading Blockchain and Cryptocurrency advocate fully cooperated with the FBI as we believe in the legitimacy uses of this amazing technology.
“We will continue to work towards a world where Blockchain is used for the purpose it was intended for by promoting education and helping with integrations globally.”
The FBI quickly figured out that the cointpointpartners.net email address had nothing to do with CoinPoint, and that the entire scam was created by Thomas to swindle victims.
Now that the case has concluded, U.S. District Judge Donald W. Molloy has ordered Thomas to repay the more than $200,000 named above, as well as serve one year and one day in prison, and three years of supervised release.
This case highlights the need for consumers to do their due diligence on any investment opportunity, especially when it comes to cryptocurrency. Until the digital asset space gets better regulated, legitimate companies like CoinPoint and investors can be harmed by bad actors trying to get rich quick.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.