Four Russians have been indicted in the United States for operating a crypto pyramid and ponzi scheme that defrauded investors of millions of dollars. If convicted, they face up to 20 years in prison for their role in the purported decentralized financial (defi) platform Forsage.
The founders of Forsage were charged with operating a cryptocurrency pyramid
A federal grand jury in Oregon filed an indictment Wednesday charging the founders of the defi crypto investment platform, which authorities believe was a global Ponzi scheme. According to aannouncementby the U.S. Department of Justice, the entity, Forsage, allegedly raised about $340 million from its victims.
The four indicted, Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev, and Sergey Maslakov, are all citizens of the Russian Federation. Some of them used one or more aliases while actively promoting the project as a legitimate, profitable, and low-risk business opportunity through their websites and social media. For example, Sergeyev identified himself as Mike Mooney or Gleb Million.
Forsage was generally promoted as a decentralized matrix project based on network marketing and smart contracts. In reality, it was set up and operated as a Ponzi-like investment scheme to defraud investors worldwide. Each of the defendants is charged with conspiracy to commit wire fraud. If convicted, they face up to 20 years in prison.
Court documents suggest that the Russian nationals deployed smart contracts on the Ethereum, Binance smartchain, and Tron blockchain. An analysis of the code showed that as soon as someone invested in Forsage by purchasing so-called “slots” of smart contracts, the funds were used to pay previous Forsage investors.
Oregon U.S. Attorney Natalie Wight emphasized that the indictment was the result of a months-long investigation. She elaborated, “Prosecuting foreign actors who use new technologies to defraud in emerging financial markets is a complex endeavor that is only possible with the full and complete coordination of multiple law enforcement agencies.”
Blockchain forensics confirmed that more than 80% of Forsage investors received less Ether (ETH) than they invested in its Ethereum program. Additionally, at least one smart contract was used to divert investor funds to cryptocurrency accounts controlled by the founders.
Forsage went online in January 2020. The indictment of the Russians comes after the U.S. Securities and Exchange Commission (SEC) last August indicted 11 people, four co-founders and seven promoters of the platform for their participation in the creation and promotion of a fraudulent crypto pyramid and Ponzi scheme.
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