U.S. Promoter of Foreign Cryptocurrency Company Sentenced to Prison for Role in Fraud Scheme | USAO-SDCA

Assistant U. S. Attorneys Carl Brooker, Lisa Sanniti, and Mark Pletcher    

NEWS RELEASE SUMMARY—September 16, 2022

SAN DIEGO— A Los Angeles man was sentenced in federal courtroom at the moment to 38­ months in jail for his participation in BitConnect, a large fraudulent cryptocurrency funding scheme, which defrauded hundreds of traders from america and overseas.

In line with courtroom paperwork, Glenn Arcaro, 44, conspired with others to use investor curiosity in cryptocurrency by fraudulently advertising BitConnect’s proprietary coin providing and digital forex trade as a profitable funding. Arcaro and others misled traders about BitConnect’s “Lending Program.” Beneath this program, Arcaro touted BitConnect’s purported proprietary expertise, referred to as the “BitConnect Buying and selling Bot” and “Volatility Software program,” as having the ability to generate substantial earnings and assured returns through the use of traders’ cash to commerce on the volatility of cryptocurrency trade markets.

In reality, nonetheless, BitConnect operated a textbook Ponzi scheme by paying earlier BitConnect traders with cash from later traders. Moreover, Arcaro and others ensured as much as 15 p.c of the cash invested into BitConnect went straight right into a slush fund for use for the good thing about the proprietor and promoters of BitConnect. The BitConnect Ponzi scheme ensnared 4,154 victims from 95 nations making it a real worldwide Ponzi scheme.

U.S. Lawyer Randy Grossman mentioned, “The U.S. Lawyer’s Workplace for the Southern District of California is dedicated to making sure justice for victims of this Ponzi scheme. Placing a technical sheen on a classic scheme won’t cease this workplace’s pursuit of a simply final result.” Grossman praised the work of FBI’s Cleveland Discipline Workplace, in addition to IRS-CI, the Monetary Investigations and Border Crimes Activity Power – a multiagency process drive based mostly in San Diego and Imperial counties that’s funded by the Treasury Government Workplace of Asset Forfeiture.

“Figuring out and investigating criminals who commit complicated monetary crimes beneath the guise of a sound funding technique are a precedence of the FBI,” mentioned Cleveland FBI Particular Agent in Cost Gregory Nelsen.

“The worldwide attain and hundreds of victims Mr. Arcaro impacted underscores the truth that fiscal crimes that mix the attract of cryptocurrency with new expertise and a savvy advertising technique are borderless and infrequently start by way of a relationship constructed on belief, hope, and promise.  The FBI, along with our federal, state, and native companions, will proceed to work tirelessly to make sure conniving criminals are now not a risk to any particular person or enterprise in our society.”

“Glenn Arcaro and his co-conspirators created a worldwide net of deception and fraud,” mentioned IRS-CI Particular Agent in Cost Tyler Hatcher. “IRS-CI and our legislation enforcement companions diligently unraveled this net of lies, and at the moment’s sentencing is a reminder that fraud doesn’t pay.  You can be caught, and you’ll go to jail.”

Arcaro admitted that he earned a minimum of $24 million from the BitConnect scheme, all of which, in accordance with courtroom paperwork, will now be repaid to traders in restitution or forfeited to the federal government. Arcaro took steps to transmit the BitConnect proceeds that he earned to offshore accounts, rework among the proceeds into treasured metals storage, and procure overseas passports. Arcaro’s objective was to keep away from paying federal and state earnings taxes on his earnings earned from the scheme and to defend his property from assortment by the Inside Income Service.

Assistant U.S. Attorneys Carl Brooker, Lisa Sanniti, and Mark W. Pletcher of the Southern District of California and Trial Lawyer Kevin Lowell of the Prison Division’s Fraud Part prosecuted the case. The Division of Justice Workplace of Worldwide Affairs and United States Postal Inspection Service supplied indispensable help to the investigation.

DEFENDANT                                               Case Quantity 21CR2542-TWR                               

Glenn Arcaro                                                  Los Angeles, CA                    Age: 45

SUMMARY OF CHARGES

Conspiracy to Commit Wire Fraud—Title 18, U.S.C., Part 1349

Prison Forfeiture—Title 18, U.S.C., Part 982

Most penalty: Twenty years in jail, $250,000 nice or twice the gross acquire or loss from the offense, whichever is bigger; forfeiture and restitution

AGENCIES

FBI

IRS Prison Investigation—Monetary Investigations and Border Crimes Activity Power

United States Postal Inspection Service

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