A New York resident is facing fraud charges in connection with a $4.5 million digital currency scheme.
The U.S. Department of Justice (DoJ) charged Douglas Jae Woo Kim with wire fraud at a New York federal court. Kim appeared before U.S. Magistrate Judge Sallie Kim on July 15 to face the charge.
Authorities said the 27-year-old New Yorker posed as an experienced digital currency trader to his friends, asking them to lend him money for trading. He started in 2017 when he allegedly contacted his first victim asking for a short-term loan. Kim claimed to be investing in a digital currency trading platform where he would make money from fees charged, authorities said, noting that the suspect told friends he invested up to $400,000 of his own money.
With another victim, he touted a ‘very low risk and fairly modest’ digital currency investment and requested for a short-term loan, according to the DoJ. Kim reportedly received $200,000 in ETH from the victim, which he allegedly converted to BTC. Authorities said Kim transferred the assets he received to internationally licensed online gambling sites.
Kim allegedly raised over $4.5 million from his scheme, according to the justice department.
Kim faces one count of wire fraud, which could land him in jail for up to two decades, with a $250,000 fine, if convicted. The court could also impose additional terms such as supervised release and restitution if it deems fit. Kim’s next court appearance is on August 19, 2020.
The DoJ has brought to justice several digital currency scammers as it seeks to rid the industry of crime. A month ago, it charged a reported Russian BTC scammer in the largest U.S. cyber fraud case ever. The scammer was allegedly a member of Infraud, a global organization of cybercriminals that has defrauded victims of over $2.2 billion.
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