Takings were spent on luxury cars, jewellery & real estate, rather than cryptocurrency mining & trading, surprise-surprise. The operators of a worldwide cryptocurrency-based Ponzi scheme have stayed charged with fraud & money laundering succeeding a U.S. Homeland Security Investigations probe.
Conferring to an announcement from the U.S. Department of Justice, four of the five suspected operators of AirBit Club, which allegedly netted 10M dollars from victims, were detained & due to appear in court on Aug. 18, while the fifth was arrested in Panama & is awaiting extradition to the U.S.
The scheme was launched in late 2015 & sold as a multi-level marketing club in the cryptocurrency industry. The defendants supposedly hosted lavish presentations to encourage investors to part with cash, promising guaranteed daily revenues from cryptocurrency mining & trading.
Whereas an online portal for investors did indeed show these “profits” building up, there was, in element, no cryptocurrency mining or trading taking place. In its place, the monies placed were spent on luxury goods & real estate, & were allegedly used to finance more extravagant presentations to bait in more victims.
As initial as 2016, club members wishing to withdraw profits were met with excuses, delays & hidden fees & supposedly said that they must recruit new members if they desired to receive the returns.
The defendants similarly tried to conceal the scheme & their involvement by requesting membership payments in cash, allegedly laundering at least $20M of proceeds through various trusts & bank accounts, & removing negative information about the scheme from the internet. One member of an additional early crypto-based Ponzi scheme that netted $722M pleaded guilty to counts of wire fraud & selling unregistered securities.