Satish Kumbhani, co-founder of BitConnect, plunged into deeper trouble as Indian police put him under investigation over a $2.4 billion scam that could land him 70 years in jail if proven guilty.
The U.S. securities regulator says Satish Kumbhani can’t be located and has likely relocated from his homeland India to an unknown address in a different country.
A San Diego court charged Satish Kumbhani with wire fraud, conspiracy to commit commodity price manipulation, and international money laundering.
The 11th Circuit Court of Appeals overturned an earlier judgment which threw out the class-action lawsuit against the promoters as they only used online means.
As it turns out, the U.S. government is terrible at deciding when to sell and has squandered many opportunities related to its haul of seized digital assets.
Glenn Arcaro previously pleaded guilty to conspiracy to commit wire fraud for his role in BitConnect and had $56 million seized by the Justice Department.
The stash was seized from the “number one promoter” of the $2B BitConnect scam and is the largest single recovery of a digital currency fraud scheme ever.
The securities regulator has levied a new action against BitConnect founder Satish Kumbhani and the lead U.S. promoter after they allegedly defrauded 325,000 BTC from investors.
Michael Crypto and Joshua Jeppesen agreed to the judgment without admitting or denying the allegations and will give U.S. securities regulator access to BTC wallets.
The regulator charged six promoters in May, and as per a new report, it’s set to settle with four of these, with penalties ranging from $526,000 to $3 million.
The U.S. Securities and Exchange Commission said it will commence action against a group of well-known online "influencers" associated with the now-infamous BitConnect investment scheme.
The Australian regulator brought the legal action following an investigation into John Louis Anthony Bigatton and his involvement with the multi-billion dollar scam, which has allegedly targeted victims across the world.
Back in September, the regulator slapped Bigatton with a seven year ban on providing financial services. Now, he stands accused of operating an unregistered managed investment scheme and providing financial advice without a license to do so, contrary to the laws of Australia.
Bigatton has also been accused of making false and misleading statements to entice investors to part with their cash, during the period August 2017 to January 2018, numbering four separate counts.
Altogether, the charges could see Bigatton facing a custodial sentence of up to 5 years in jail, plus a fine up to a maximum of AUD$42,000, equivalent to around US$30,800, for operating an unregistered investment scheme, with a further fine at the same level plus 2 years in jail for providing unlicensed financial advice.
On each of the four charges of false and misleading statements, Bigatton also faces up to 10 years in jail, with a fine of up to AUD$945,000 available to the court—roughly US$693,000.
The case against John Louis Anthony Bigatton comes amid a global crackdown on BitConnect and its senior executives. The scam was pulled successfully around the world, encouraging unsuspecting investors to part with their money to support the fraudulent investment scheme. In 2019, the FBI called on investors of the BitConnect scheme to participate in a survey that will help the U.S. federal agency identify potential victims and possibly reach out to them for additional information that might help authorities crack the case.
Despite the enforcement action against BitConnect by regulators in Australia and elsewhere, similar digital currency schemes still continue to operate worldwide, catching vulnerable investors in their frauds.
See also: CoinGeek Live presentation, Digital Currency & Global Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers
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John Bigatton is accused of operating an unregistered managed investment scheme and providing financial advice without a license to do so, contrary to the laws of Australia.