In December 2019, three men were arrested on suspicion of participating in a “high-tech Ponzi scheme” as described by the persecutor.
According to a report from the U.S Justice Department, the three men from April 2014 through December 2019 operated BitClub Network, a fraudulent scheme that solicited money from investors in exchange for shares in so-called cryptocurrency mining pools and rewarded investors for recruiting new investors.
Goettsche, one of the three men involved in the fraud, argued with his conspirators that their target audience would be “dumb” investors, called them “sheep” and said he was “building this whole model on the backs of idiots”.
Paul Delacourt, deputy director in charge of the FBI’s Los Angeles office, said: “The defendants allegedly made hundreds of millions of dollars by continuing to recruit new investors over several years while spending victims’ money lavishly.”
“The defendants allegedly made hundreds of millions of dollars by continuing to recruit new investors over several years while spending victims’ money lavishly.”
The crypto fraud conspiracy carries a potential charge of maximum 20 years in prison and a $250K fine.