The US Department of justice announced that it has accused the operators of a cryptocurrency ponzi scheme of fraud and money laundering.
A $ 20 million fake company
Five suspects have been charged for their alleged role in the activities of a fraudulent money laundering network, tricking people around the world into investing in AirBit Club, which was allegedly a cryptocurrency mining and trading company.
Acting US attorney for the Southern district of New York Audrey Strauss said the work done by the US Internal security investigation Service (HSI) was crucial in bringing charges against five alleged criminals:
It is alleged that the defendants give a modern look to a long-standing investment Scam by promising extraordinary rates of guaranteed profit from phantom investments in cryptocurrencies. Thanks to HSI, the accused are in custody and face serious criminal charges.
The founders were buying luxury cars, jewelry and real estate
These alleged scammers did their best to sell their scheme to their victims through enticing recruitment activities, and then shamelessly used the proceeds of their scheme to recruit additional victims, through even more aggressive and generous marketing moves.
It is reported that more than $ 20 million was laundered during the operation. The indictment alleges that Rodriguez, DOS Santos, Hughes, Millan and Aguilar participated in a scheme that defrauded investors by promising guaranteed profits from club membership. Since the end of 2015, this operation has been advertised as a multi-level marketing club in the cryptocurrency industry, whose members will receive passive daily profits from mining and trading crypto assets.
The five accused allegedly traveled across America, as well as to countries in South America, Asia and Eastern Europe, hosting lavish exhibitions and presentations advertising AirBit Club membership. Potential members had to purchase a membership for cash and could only see their daily earnings through an online portal. Participants could see their constantly growing profits on the portal, but it was reported that these figures were completely false, and that mining or trading of cryptocurrencies was not actually performed. Victims tried to withdraw funds .
The justice Department also reports that since 2016, victims have struggled to withdraw money from their online portals. The organizers of the scheme offered various excuses and imposed exorbitant hidden commissions , which made up almost half of the processed conclusions, and were naturally misappropriated. Charges of electronic fraud and money laundering carry a maximum sentence of up to 20 years in prison, while charges of Bank fraud can result in a maximum sentence of 30 years in prison.