US feds arrest 4 suspects in $44M BTC Ponzi schemes

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Two U.S. federal agencies have announced charges against four individuals whom they accuse of defrauding over $44 million from investors through three digital asset scams.

In its federal civil enforcement action filed with the Eastern District of New York, the Commodity Futures Trading Commission (CFTC) charged three Americans—Dwayne Golden, Gregory Aggesen, and Marquis Egerton, and one Indian national, Jatin Patel, of soliciting $44 million through Ponzi schemes that involved BTC and misappropriating millions of dollars.

CFTC alleges that the three suspects operated Empowercoin and Ecoinplus, through which they solicited more than $23 million in BTC. Together with Patel, they also operated JetCoin, through which they raised $21 million from investors. 

As the watchdog alleges, the three projects all promised guaranteed returns. They claimed that they had teams of professionals who were trading the BTC and promised a 200% profit return in 90 days. 

The reality was much different, however. CFTC says that the four either misappropriated the BTC and channeled it to their personal needs or used it to pay off some of the earlier investors in a ponzi scheme fashion. In total, they misappropriated $9.8 million through Ecoinplus and Empowercoin and $7.8 million through the JetCoin project.

In accompanying charges, the Department of Justice (DoJ) unsealed an 11-count indictment against the three Americans for defrauding investors. The charges included conspiracy to commit wire fraud, money laundering, and related substantive counts. 

DoJ also charged them with conspiracy to obstruct justice, tampering with evidence, and obstructing justice. From June 2017 to present, the three allegedly conspired to obstruct a Federal Trade Commission (FTC) investigation and a federal criminal grand jury investigation into the fraudulent schemes. They also destroyed evidence and provided the FTC with false and misleading information.

“Whether we’re dealing with virtual currency or cold-hard cash, schemers continue to capitalize on investors’ best intentions and pocket their ill-gotten gains,” FBI Assistant Director-in-Charge Michael Driscoll commented, pledging his office’s resources to curb all manner of financial crimes.

“The scams may have been online and virtual, but these charges are very real. This Office is committed to protecting the public from criminals who view cryptocurrency as a new frontier to perpetrate old fashioned crimes of fraud and money laundering,” United States Attorney for the Eastern District of New York Breon Peace added.

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