AirBit Club Ponzi Operators Charged With Fraud and Money Laundering
The operators of a global cryptocurrency-based Ponzi scheme have been charged with fraud and money laundering following a United States Homeland Security Investigations probe.
According to an announcement from the U.S. Department of
Justice, four of the five alleged operators of AirBit Club, which allegedly
netted tens of millions of dollars from victims, were arrested and due to
appear in court on Aug. 18, while the fifth was arrested in Panama and is
awaiting extradition to the U.S.
The scheme was launched in late 2015 and sold as a multi-level
marketing club in the cryptocurrency industry. The defendants purportedly
hosted lavish presentations to encourage investors to part with cash, promising
guaranteed daily returns from cryptocurrency mining and trading.
While an online portal for investors did indeed show these
“profits” building up, there was in fact no cryptocurrency mining or trading
taking place. Instead, the monies deposited were spent on luxury goods and real
estate, and were allegedly used to finance even more extravagant presentations
to lure in more victims.
As early as 2016, club members wishing to withdraw proceeds
were met with excuses, delays and hidden fees, and reportedly told that they
must recruit new members if they wanted to receive the returns.
The defendants also tried to conceal the scheme and their
involvement by requesting membership payments in cash, allegedly laundering at
least $20 million of proceeds through various trusts and bank accounts, and
removing negative information about the scheme from the internet.
As Cointelegraph reported last month, one member of another
early crypto-based Ponzi scheme that netted $722 million pled guilty to counts
of wire fraud and selling unregistered securities.
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