US Sentences Promoter of $3.4B Bitconnect Crypto Ponzi Scheme to 38 Months in Prison – A Los Angeles man has been sentenced to 38 months in prison for his participation in Bitconnect, the U.S. Department of Justice (DOJ) announced on Friday. Bitconnect was referred to by the DOJ as a massive fraudulent cryptocurrency investment scheme.
Glenn Arcaro, 44, and other individuals planned to take advantage of investor interest in cryptocurrencies by misrepresenting Bitconnect’s proprietary coin offering and digital currency exchange as a profitable investment, according to court documents.
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As stated by the Justice Department: “The Bitconnect Ponzi scheme ensnared 4,154 victims from 95 countries making it a true worldwide Ponzi scheme.”
The DOJ claims that Arcaro transferred the money he received from the Bitconnect scheme to offshore accounts, converted some of the money into storage for precious metals, and applied for foreign passports. His intention, according to the Justice Department, was to avoid paying federal and state income taxes on his Bitconnect earnings as well as to protect his assets from being seized by the Internal Revenue Service (IRS).
The DOJ detailed: “Arcaro admitted that he earned no less than $24 million from the Bitconnect scheme, all of which, according to court documents, will now be repaid to investors in restitution or forfeited to the government.”
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Authorities in the United States claim that the Bitconnect Ponzi scam peaked with a market capitalization of $3.4 billion. Investors are said to have given the founder and his accomplices roughly $2.4 billion. Despite the fact that the U.S. had previously charged Bitconnect’s founder with a crime back in February, the Indian police just opened an investigation and apprehended him.
