Mind of Bitcoin Mining Ponzi Scheme Extradited to US: $ 20 Million Money Laundered for Victims

The US government claims to have extradited Gutemberg Dos Santos, the co-founder of the Airbit Club Ponzi scheme from Panama and is now awaiting his trial in a Manhattan court. Dos Santos is facing allegations related to his role in perpetuating a “cryptocurrency” scam that defrauded victims of “tens of millions of dollars”.

Fraudulent complaints

According to the United States Department of Justice (DOJ), Dos Santos and five accomplices are accused of falsely promising victims that they will earn passive income from cryptocurrency mining. However, the investigations found that “no bitcoin mining or trading has actually taken place on behalf of the victims.”

In a November 30 statement, the DOJ said Dos Santos – a citizen of Brazil and the United States – instead “hosted lavish exhibits and small community presentations aimed at convincing victims to purchase Airbit Club membership.” . Once Dos Santos and his accomplices gained control of the money, they would proceed to trick unsuspecting victims into believing that everything was okay. The DOJ press release explains:

Following a victim’s run over, a promoter gave the victim access to an Airbit Club online portal to view alleged returns on subscriptions. Although the victims saw “profits” accumulating on their online portal, those representations were false.

With the victims convinced that their “investment” was earning them an astronomical return, Dos Santos and his accomplices were meanwhile using the victims’ funds to enrich themselves. As the Justice Department statement explains, the accused “spent the victims’ money on cars, jewelry and luxury homes and funded more extravagant exhibitions to recruit more victims.”

Bringing the “New Blood”

According to the DOJ, one of the defendants, attorney Scott Hughes is separately accused of “helping to remove negative information about Airbit Club and Vizinova from the Internet”. Hughes previously represented Dos Santos when he faced a US SEC investigation.

Additionally, the Justice Department is accusing Dos Santos and the defendants of using “excuses, delays and hidden costs” to deny victims access to their funds. In one case, a female victim was told that “she would have to bring ‘new blood’ into the Airbit Club program to receive her return.” The victim was informed of this after filing a complaint about his inability to make a withdrawal.

In another case, a victim was told that his account had been closed and that his main investment had been lost. One of the defendants mentioned the following as reasons for the loss:

Due to the implementation of the Financial Sustainability Reserve, policy # 34 of the Airbit Club Terms and Conditions, due to the economic and financial crisis caused by (Covid-19).

According to the DOJ, a total of $ 20 million is believed to have been laundered by Dos Santos and his accomplices. As a result, Dos Santos, who must answer three charges, faces a maximum total sentence of 70 years in prison.

Do you think Dos Santos’ incarceration will help the cause of the victims? Share your thoughts in the comments section below.

Image credits: Shutterstock, Pixabay, Wiki Commons

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