The United States has sentenced a Los Angeles man to 38 months in federal prison for his role in the $3.4 billion BitConnect crypto Ponzi scheme. He admitted to making more than $24 million from the scam, all of which will now be “repaid to investors in restitution or forfeited to the government,” the Department of Justice (DOJ) explained.
U.S. Bitconnect Promoter Sentenced to 38 Months in Prison
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The U.S. Department of Justice (DOJ) announced Friday that it sentenced a Los Angeles man to “38 months in prison for his participation in Bitconnect.” The DOJ called Bitconnect a described as a “massive fraudulent cryptocurrency investment scheme.”
Glenn Arcaro, 44, conspired with others to capitalize on investor interest in cryptocurrencies by fraudulently marketing Bitconnect’s proprietary coin offering and digital currency exchange as a lucrative investment, court documents show.
The DOJ explained.
The Bitconnect Ponzi Scheme has claimed 4,154 victims from 95 countries, making it a truly global ponzi scheme.
According to the DOJ, Arcaro transferred proceeds from the Bitconnect scheme to offshore accounts, converted some of the proceeds into custody of precious metals, and obtained foreign passports. The DOJ noted that his purpose was to avoid paying federal and state income taxes on his Bitconnect proceeds and to protect his assets from collection by the Internal Revenue Service (IRS).
The DOJ elaborated.
Arcaro admitted that he made more than $24 million from the Bitconnect scheme. According to court documents, that entire amount will now be returned to investors or forfeited to the government.
According to U.S. authorities, the Bitconnect Ponzi Scheme reached a market capitalization of $3.4 billion at its peak. The founders and their co-conspirators allegedly received approximately $2.4 billion from investors. Recently, Indian police launched an investigation into Bitconnect and arrested its founder, although the U.S. had already indicted him in February.
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