SAN DIEGO (CNS) – A federal judge in San Diego on Thursday ordered one of the leaders of an alleged investment fraud scheme involving cryptocurrencies to pay more than $17 million in damages to nearly 800 victims worldwide. I ordered.
The restitution order stems from a grand jury indictment returned against the owner and operator of cryptocurrency company BitConnect. Federal prosecutors say the company operated like a Ponzi scheme, with investors being repaid with money from other investors.
The US-based company’s top promoter, Glenn Arcaro, 45, pleaded guilty to federal charges and was sentenced to just over three years in prison. Arcaro was ordered Thursday to pay investors in more than 40 countries $17,646,801 in compensation for his victims.
BitConnect founder Satish Kumbhani has also been indicted and is on the run.
According to the U.S. Attorney’s Office, BitConnect’s investors were misled by the company’s claims that it used proprietary technology known as the “BitConnect Trading Bot” and “Volatility Software” to turn investors’ money into huge profits. it was done.
However, while investor funds were being used to repay other BitConnect investors, prosecutors said Arcaro and others were “for the benefit of (BitConnect’s) owners and promoters. It said it put up to 15% of investors’ funds in slush funds so that it could be used for
U.S. Attorney Randy Grossman said, “Hundreds of people have suffered devastating financial losses as a result of this horrific fraud. We hope today’s ruling will bring some relief to the victims.
Kumbhani was indicted last February. Authorities have asked anyone with information about his whereabouts to contact the FBI at 216-522-1400.