Bitcoin scam? FBI is investigating Swabian crypto entrepreneur

Bitcoin scam?  FBI is investigating Swabian crypto entrepreneur

A man from Baden-Württemberg is said to have deprived investors in the USA of Bitcoin and Ether on a large scale. Authorities in New York believe his crypto platform is an “international multimillion-dollar fraud” – and have filed charges.

This article is adapted from the business magazine Capital and is available here for ten days. Afterwards it will only be available to read at again. Capital belongs like that star to RTL Germany.

A 64-year-old crypto entrepreneur from Baden-Württemberg is employing the authorities in the USA: Horst J., the boss of the supposedly internationally active fintech USI-Tech, is said to have defrauded private investors of a total of 94 million US dollars in a large-scale crypto scam brought. This emerges from an indictment by the US Attorney’s Office for the Eastern District of New York. J. and his lawyers did not comment on this when asked.

The FBI had already arrested the entrepreneur in December 2023 when he apparently wanted to enter the USA for a planned Christmas vacation in Florida. The case initially went unnoticed in Germany.

Fraud charges

“Against Mr. J. (Name shortened by the editors“) is currently facing four counts: conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud and conspiracy to commit money laundering,” a spokesperson for the U.S. Attorney’s Office for the Eastern District of New York told Finance Forward and Capital regarding the current status of the case.

The entrepreneur is currently free on bail of $5 million, but is not allowed to leave New York City or Long Island. He said he was negotiating a settlement with the government. Therefore, no court case has been scheduled yet.

Multilevel marketing with “Bitcoin packages”

Mr. J.’s case goes back to 2017, when there was still a gold rush atmosphere in the crypto scene: the value of Bitcoin had increased more than twenty-fold within a year; Ever new stories of young nerds who became millionaires virtually overnight fueled the price explosion.

During this time, J. is said to have aggressively promoted new investment opportunities in cryptocurrencies with his company USI-Tech (short for “United Software Intelligence”), the returns from which would make even “the most experienced traders jealous”. He promoted this mainly on the Internet and at various appearances in Las Vegas and Pennsylvania.

According to the indictment, USI-Tech promised passive income with a guaranteed return of 140 percent within around seven months. Investors should entrust the company with Bitcoins worth 50 euros each for so-called “BTC packages”, which it would then miraculously increase thanks to unspecified mining technology and automated trading software. In addition, the company apparently offered bonuses for recruiting additional investors – a typical ploy in multi-level marketing pyramids.

Later, USI-Tech is said to have repeated a similar strategy again with the alleged ICO of its own “tech token”.

“International multimillion-dollar scam”

According to the US Attorney’s Office for the Eastern District of New York, J. collected around 1,800 Bitcoins and 28,600 Ether from investors in this way, which were said to have been worth around $94 million at the time of the indictment. When the US authorities discovered him, he is said to have gradually transferred the coins from USI-Tech’s wallets to his own by the beginning of 2018 and went into hiding.

“In reality, the platform was just a front, and when questions arose, (J.) stole millions of dollars of his investors’ money and fled the country,” FBI Assistant Director for New York James Smith said in a joint press release with the US Attorney’s Office on this.

The authorities describe J.’s actions in that same report as an “international multimillion-dollar fraud scam.” However, at the request of this editorial team, the US Attorney’s Office did not provide any information about the number or origin of the alleged victims.

J. and his lawyers left a request for comment on the indictment unanswered. The 64-year-old crypto entrepreneur is presumed innocent until he is convicted.

This text first appeared at the magazine for the new financial world, which is created in cooperation between Capital and OMR.

Source: Stern

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