A key figure in what is believed to be the biggest crypto fraud in history has pled guilty to criminal charges in a US federal court.
Glen Arcaro, the director and promoter of BitConnect – a high yield crypto investment scheme that was shut down in 2018 – pled guilty to conspiracy to commit wire fraud, according to a Department of Justice (DOJ) statement.
According to the DOJ, Arcaro admitted to misleading investors about BitConnect’s supposed proprietary technology such as a trading bot and “volatility software,” helping the scheme net billions of dollars.
Says Acting U.S. Attorney Randy S. Grossman of the Southern District of California,
“Arcaro and his confidantes preyed on investor interest in cryptocurrency. As a result, a staggering number of individuals lost an enormous amount of money.”
The DOJ says that Arcaro sat at the top of a large network of promoters in North America known as the BitConnect Referral Program. He earned as much as 15% of every investment in the BitConnect “Lending Program” and also received portions of other investments that came from a concealed slush fund.
Ryan L. Korner of the Internal Revenue Service Criminal Investigation’s (IRS-CI) Los Angeles Field Office says in the DOJ statement that Arcaro also purposely evaded regulatory requirements with the U.S. Securities and Exchange Commission (SEC) and the Financial Crimes Enforcement Network (FinCEN).
“Arcaro capitalized on the emergence of cryptocurrency markets, enticing innocent investors worldwide to get in early by promising them guaranteed returns, and exploiting the internet and social media to reach a larger pool of victims with greater ease and speed… To conceal and further their scheme, Arcaro and his accomplices circumvented reporting regulations by the SEC and FinCEN, U.S. agencies that were created to protect investors and safeguard our financial systems. IRS-CI will pursue and root out these scams to protect investors and bring these financial fraudsters to justice.”
Arcaro admitted to profiting at least $24 million through the scheme which he must repay to investors, according to the DOJ statement.
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