A 62-year-old man from the United States has pled guilty for duping more than 70,000 victims to invest in his fraudulent crypto schemes, obtaining $147 million.
Announced on Wednesday by the Department of Justice, Steve Chen agreed to plead guilty to one count of conspiracy to commit wire fraud and one count of tax evasion.
As stated by Chen in his plea agreement, he was the owner and chief executive officer of US Fine Investment Arts (USFIA) and six other companies, and promoted and solicited USFIA investments from July 2013 until September 2015.
He duped thousands of investors claiming that USFIA is a successful multi-level marketing scheme and extracted amber and other gemstones from non-existent mines it “owned” in the United States, the Dominican Republic, Argentina, and Mexico.
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Each victim invested between $1,000 to $30,000 as the total amount raised went to approximately $147 million.
Chen also promised the victims that he would take the company public via an initial public offering (IPO); however, in his statement, he admitted that he had no such intentions.
Hard to evade the taxman
The authorities also put charges of tax evasion on him as he evaded federal tax evasion by reporting a gross income of $138,015 in 2014, while he earned $4,816,193 that year, making him liable to pay $1,885,094 in back taxes without interest and penalties.
Commenting on the case, Paul Delacourt, the assistant director in charge of the FBI’s Los Angeles Field Office, said: “Mr. Chen lured victim investors around the globe by creating a mirage made of fashionable cryptocurrency features and dynamic marketing tactics. The investing public should be aware that cryptocurrency schemes are more prevalent and more sophisticated than ever, but those who perpetrate them use the same tactics as con-artists always have – by convincing investors to risk their money in the bank based on false promises of imminent wealth.”