Cryptocurrency, Fraud and Scams

BitClub Promoter Charged for $722 Million Crypto Fraud Scheme

A Californian man has pleaded guilty for his association in committing BitClub Network, a cryptocurrency mining scheme that has generated at least $722 million.

BitClub promoter charged with fraud

Joseph Frank Abel pleaded guilty for connivance in fraud and offered and marketed unregistered securities through BitClub Network. The US Department of Justice (DoJ) also charged Abel for consenting to a false tax return in 2017, purportedly neglecting to report $1 million worth of earned cryptocurrency. Abel and four other of his accomplices were indicted for their roles in the BitClub Network.

BitClub Network is a fraudulent crypto mining scheme hustled from investors exchanging shares in purported cryptocurrency mining pools. Investors were guaranteed rewards for recruiting new affiliates to the network. The Ponzi scheme was in effect for five years, from April 2014 to December 2019, before being shut down.

It produced at least $722 million and was promoted digitally by Abel.

He was a big-shot promoter for the fraudulent crypto mining network. Based in the US, BitClub Network membership was also marketed throughout Asia, Africa, and Europe.

During a video conference with the US District Judge Claire C. Cecchi, Abel conceded to soliciting investors and taking their money to exchange promised shares in BitClub’s crypto mining pools. As per the information we acquired from an Internal Revenue Service (IRS) announcement released yesterday, Abel also encouraged other American investors to use a virtual private network (VPN) to conceal their US-based IP addresses to prevent US law enforcement detection.

The former BitClub promoter is now anticipating his sentencing, set for January 2021. Abel has been fined $250,000 by US regulators and now faces up to five years in prison. As for the tax avoidance charge, the fraud count stipulates a maximum penalty of three years of imprisonment and a fine of $100,000.

Ponzi schemes generate billions.

Related cryptocurrency Ponzi schemes that have also been condemned by the DoJ as fraudulent investment scams have generated billions in before being shut down. Some of the biggest crypto schemes include OneCoin and BitConnect, which have made $4 billion and $2.6 billion through money laundering and bank fraud.

Lately, the US Department of Justice investigated to recover approximately 400 million dollars in a forfeiture money judgment presented on Monday. Mark Scott, the previous attorney for OneCoin founder Ruja Ignatova, was pronounced guilty of money laundering and bank fraud in the multi-billion dollar Ponzi scheme.

As of this writing, law enforcement asks the US District Court of New York judge to freeze Scott’s assets to recuperate some of the laundered funds. The former lawyer risks disbarment as well.

Be careful with Crypto Scam Artists. Here’s a good read:

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