Swedish man involved in digital currency fraud faces 40 years in jail after guilty plea

Swedish man involved in digital currency fraud faces 40 years in jail after guilty plea

A Swedish man accused of defrauding over 3,500 investors through digital currencies has pleaded guilty to charges of money laundering, wire fraud and securities fraud. Authorities said the man lured investors to invest in two of his firms in BTC, promising payments in gold.

Roger Nils-Jones Karlsson is the founder of Eastern Metal Securities, a company that authorities said targeted no less than 3,577 investors. As the U.S. Department of Justice states in its press release, he has been running the firm since 2012.

Karlsson reportedly would induce his targets to invest in the firm, promising them payouts in gold. He sold shares in his firm for less than $100, assuring them that they would receive 1.15 kilograms of gold as an eventual payout. At press time, this amount of gold was worth over $62,500.

In the unlikely event that the gold payout didn’t happen, Karlsson promised his investors that he would pay them back 97% of the money they invested. However, as per the DoJ, he had no way of paying them back. All the money he raised went towards purchasing expensive homes and resorts in Thailand.

When the investors asked to cash out, Karlsson would convince them otherwise. On one occasion, he reportedly claimed he could not pay his investors because “releasing so much money all at once could cause a negative effect on financial systems throughout the world.” He also lied that he was working with the SEC to prepare a legal framework for the payout.

For the wire fraud and securities fraud charges, the 45-year-old faces 20 years behind bars and a maximum $250,000 fine. For money laundering, he faces 20 years in prison as well as a $500,000 maximum fine. The court may also impose additional terms of supervised release, fines and restitution.

Just days ago, DoJ charged yet another BTC scammer who made off with $7 million from investors. Krstijan Krstic used lies, false promises and an endorsement from actor Steven Seagal to lure unsuspecting investors into his Bitcoiin2Gen scam.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups-from BitMEX to BinanceBitcoin.comBlockstreamShapeShiftCoinbaseRipple and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

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.

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