A Los Angeles man was sentenced by the U.S. to 38 months federal prison. He is accused of participating in the Ponzi scheme Bitconnect, worth $3.4 billion. He admitted to earning no less than $24 million from the scam, all of which will now be “repaid to investors in restitution or forfeited to the government,” the Department of Justice (DOJ) explained.
US Bitconnect Promoter Sentenced To 38 Months In Prison
The U.S. Department of Justice (DOJ) announced Friday that a Los Angeles man has been sentenced to “38 months in prison for his participation in Bitconnect.” The DOJ described Bitconnect as “a massive fraudulent cryptocurrency investment scheme.”
Glenn Arcaro, 44, conspired with others to exploit investor interest in cryptocurrency by fraudulently marketing Bitconnect’s proprietary coin offering and digital currency exchange as a lucrative investment, court documents showed.
According to the Justice Department,
Bitconnect Ponzi scam ensnared 4,154 victims, from 95 countries. It is a worldwide Ponzi scheme.
The DOJ claims that Arcaro transferred the Bitconnect proceeds to offshore accounts and converted some proceeds to precious metals storage. He also obtained foreign passports. According to the Justice Department, Arcaro wanted to avoid federal and state income tax on Bitconnect income. He also wanted to protect his assets against collection by Internal Revenue Service (IRS).
Detail:
Arcaro acknowledged that he had earned more than $24million from Bitconnect. According to court documents, the entire amount will be returned to investors as restitution, or forfeited to government.
U.S. officials claim Bitconnect Ponzi Scheme had a peak market capitalization of $3.4 Billion. The $2.4 Billion in funds that the founder and his conspirators received from investors is alleged to have been a combination of their own money. Bitconnect founder was arrested by the Indian police, who also investigated the matter. However, he had been charged in the U.S. back in February.
Glenn Arcaro could be sent to jail for 38 months because of his involvement in the Bitconnect Ponzi Scheme. Comment below.
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