After he failed to comply with multiple court orders and failed pay $40 million to the U.S. Securities and Exchange Commission, a district judge ordered that a bitcoin Ponzi operator be detained and held in prison. In 2015, he pleaded guilty for securities fraud.
Bitcoin Ponzi operator faces imprisonment after failing to pay SEC
Bloomberg reported earlier that Amos L. Mazzant, the U.S. District Court Eastern District of Texas Judge, stated this week that a Bitcoin Ponzi operator would face imprisonment for civil contempt if he fails to provide the required documents and payments.
Trendon Shavers (a McKinney, Texas resident) owes more than $40M to the U.S Securities and Exchange Commission. He pleaded guilty in September 2015, one count of securitiesfraud. Judge Mazzant added that Trendon Shavers has disregarded numerous court orders.
Shavers’s flagrant disregard for the court’s orders on multiple occasions leads to only one conclusion: Shavers will only comply with the court’s orders if he is incarcerated.
Shavers and Bitcoin Savings and Trust, his company (BTCST), were charged by the SEC for running a Bitcoin Ponzi scheme in July 2013. He defrauded investors by stealing at most 764,000 BTC, according to authorities.
He was convicted by the SEC in September 2014. At the time, the regulator stated:
The court’s judgment requires Shavers and BTCST to pay more than $40 million in disgorgement and prejudgment interest, and orders each defendant to pay a civil penalty of $150,000.
Judge Mazzant’s contempt order focuses on the SEC’s effort to enforce the $40.4 million civil judgment, the publication conveyed.
Shavers was asked by the SEC to provide financial information to help determine his eligibility to pay disgorgement. Shavers stated that he made no payments, and that he earned about $4,000 per monthly. Although he was required to submit the paperwork and pay six $400 installments, Shavers failed to do so. The SEC filed more motions against him and the courts issued additional orders.
Shavers did not appear at a hearing, the district judge noted. He reiterated that other than imprisonment, he saw “no other way to coerce Shavers to comply” with court orders.
Are you convinced that Shavers should be sent to jail for failing to pay the SEC even though he pleaded guilty? We’d love to hear from you in the comments below.
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