The operator of online trading brands, Blue Bit Banc and Blue Bit Analytics, on Monday pleaded guilty to conspiracy in New York federal court for his role in defrauding investors out of $2 million in a binary options scam that also involved a crypto fraud scheme to cover up their tracks.
Blake Kantor, also known as Bill Gordon, has been hit with fraud charges and making false statements to special agents of the FBI. He was arrested in April 2018 by the federal authorities and faces about 20 years in prison, the US Justice Department said Monday.
The detailed complaint alleges that the fraudulent scheme has been going on since at least 2014 and involved false claims about Kantor’s previous success. To cover their tracks, Kantor encouraged investors to convert their binary options into ATM Coin cryptocurrency, which the agency describes as “a worthless cryptocurrency that he misleadingly told investors was worth substantial sums of money.”
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Furthermore, he used false promises to induce clients to send their money to participate in binary options trading, but in fact, they were duped into a Ponzi scheme.
Further Going down the Rabbit Hole
“Kantor defrauded investors to enrich himself and then tried to cover his tracks by lying to the federal agents investigating the scheme,” stated United States Attorney Donoghue.
He further added that although the man was prohibited from destroying his records, he lied to the FBI and altered the documents that would reveal their scheme.
The justice department’s statement contained a detailed description of how the scam operated. It says: “in March 2014, Kantor established BBB, which sold binary options. From 2014 to 2017, Kantor and others solicited and took in approximately $1.5 million from more than 700 investors in BBB’s binary options. However, Kantor did not inform the investors that a computer software program of BBB’s fraudulently altered data associated with binary options investments so that the probability of investors earning a profit favored BBB and disadvantaged investors. To further his scheme, Kantor directed that bank accounts—including one in the island nation of St. Kitts and Nevis—be opened using aliases and identifying information of others, making it more difficult to trace the funds that Kantor fraudulently took from investors.”