Assistant U. S. Attorneys Carl Brooker, Lisa Sanniti, and Mark Pletcher
NEWS RELEASE SUMMARY—September 16, 2022
SAN DIEGO— A Los Angeles man was sentenced in federal court docket as we speak to 38 months in jail for his participation in BitConnect, a large fraudulent cryptocurrency funding scheme, which defrauded 1000’s of buyers from the USA and overseas.
In accordance with court docket paperwork, Glenn Arcaro, 44, conspired with others to use investor curiosity in cryptocurrency by fraudulently advertising BitConnect’s proprietary coin providing and digital foreign money change as a profitable funding. Arcaro and others misled buyers about BitConnect’s “Lending Program.” Below this program, Arcaro touted BitConnect’s purported proprietary expertise, referred to as the “BitConnect Buying and selling Bot” and “Volatility Software program,” as having the ability to generate substantial earnings and assured returns by utilizing buyers’ cash to commerce on the volatility of cryptocurrency change markets.
In reality, nonetheless, BitConnect operated a textbook Ponzi scheme by paying earlier BitConnect buyers with cash from later buyers. Moreover, Arcaro and others ensured as much as 15 p.c of the cash invested into BitConnect went instantly right into a slush fund for use for the good thing about the proprietor and promoters of BitConnect. The BitConnect Ponzi scheme ensnared 4,154 victims from 95 international locations making it a real worldwide Ponzi scheme.
U.S. Legal professional Randy Grossman mentioned, “The U.S. Legal professional’s Workplace for the Southern District of California is dedicated to making sure justice for victims of this Ponzi scheme. Placing a technical sheen on a classic scheme won’t cease this workplace’s pursuit of a simply consequence.” Grossman praised the work of FBI’s Cleveland Discipline Workplace, in addition to IRS-CI, the Monetary Investigations and Border Crimes Activity Pressure – a multiagency activity power primarily based in San Diego and Imperial counties that’s funded by the Treasury Govt Workplace of Asset Forfeiture.
“Figuring out and investigating criminals who commit complicated monetary crimes below the guise of a sound funding technique are a precedence of the FBI,” mentioned Cleveland FBI Particular Agent in Cost Gregory Nelsen.
“The worldwide attain and 1000’s of victims Mr. Arcaro impacted underscores the truth that fiscal crimes that mix the attract of cryptocurrency with new expertise and a savvy advertising technique are borderless and infrequently start via a relationship constructed on belief, hope, and promise. The FBI, along with our federal, state, and native companions, will proceed to work tirelessly to make sure conniving criminals are now not a risk to any particular person or enterprise in our society.”
“Glenn Arcaro and his co-conspirators created a worldwide net of deception and fraud,” mentioned IRS-CI Particular Agent in Cost Tyler Hatcher. “IRS-CI and our regulation enforcement companions diligently unraveled this net of lies, and as we speak’s sentencing is a reminder that fraud doesn’t pay. You can be caught, and you’ll go to jail.”
Arcaro admitted that he earned a minimum of $24 million from the BitConnect scheme, all of which, in accordance with court docket paperwork, will now be repaid to buyers in restitution or forfeited to the federal government. Arcaro took steps to transmit the BitConnect proceeds that he earned to offshore accounts, remodel a number of the proceeds into treasured metals storage, and acquire international passports. Arcaro’s purpose was to keep away from paying federal and state earnings taxes on his earnings earned from the scheme and to defend his property from assortment by the Inside Income Service.
Assistant U.S. Attorneys Carl Brooker, Lisa Sanniti, and Mark W. Pletcher of the Southern District of California and Trial Legal professional Kevin Lowell of the Felony Division’s Fraud Part prosecuted the case. The Division of Justice Workplace of Worldwide Affairs and United States Postal Inspection Service supplied indispensable help to the investigation.
DEFENDANT Case Quantity 21CR2542-TWR
Glenn Arcaro Los Angeles, CA Age: 45
SUMMARY OF CHARGES
Conspiracy to Commit Wire Fraud—Title 18, U.S.C., Part 1349
Felony Forfeiture—Title 18, U.S.C., Part 982
Most penalty: Twenty years in jail, $250,000 wonderful or twice the gross achieve or loss from the offense, whichever is bigger; forfeiture and restitution
IRS Felony Investigation—Monetary Investigations and Border Crimes Activity Pressure
United States Postal Inspection Service