As AZCoin News reported, cryptocurrency scams are rife in the market. After Coinjer, Bitcoin HEX, recently, US police arrested three crooks involved in the fraud BitClub Network mining pool. These three crooks allegedly defrauded $ 722 million from investors.
BitClub is known to be a reasonably active pool in the cryptocurrency market. The team claimed to receive $ 136,000 as part of the wrong bitcoin transaction fee, in which it donated half to the Bitcoin Foundation in 2016. This pool also supported the controversial SegWit2x upgrade in 2017.
Fraud BitClub Network mining pool
Information of the three crooks included Matthew Brent Goettsche, 37, living in North America, Colorado; Jobadiah Sinclair Weeks, 38, living in Arvada, Colorado; and Joseph Frank Abel, 49, living in Camarillo, California. All three have been charged with wire fraud (Goettsche and Weeks) and conspiracy to provide unregistered securities through participating in the BitClub Network mining pool.
To entice investors, these three scammers faked the income statement of BitClub from their mining pool. Goettsche and a colleague made their fake numbers look “real” by providing daily earnings inconsistent on a day-to-day basis. They have consistently done this behavior between April 2014 and December 2019. Investors are always invited to buy shares of the mining pool, as well as receive additional rewards when bringing some new investors.
John Tafur, Special Agent in Charge of the IRS-Criminal Investigation group’s Newark field office, said:
“Today’s indictment alleges the defendants were involved in a sophisticated Ponzi scheme involving hundreds of millions of dollars that preyed upon Investors all over the world.”
The FBI, IRS-Criminal Investigation, and local IRS offices all participated in the investigation.
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