The planner of the so-called “epic ratio” scam by the US Department of Justice has been sentenced to ten years in prison. His crypto project raised more than $147 million, putting 72,000 investors in trouble. He was also ordered to pay more than $1.8 million in tax evasion to the Internal Revenue Service.
Scams involving fake cryptocurrencies
The US Department of Justice (DOJ) announced on Monday that California man Steve Chen has been sentenced to 10 years in prison for his “leadership” in a major crypto fraud case. Judge John Walter called Chen’s plan an “epic scale” scam.
The U.S. Department of Justice explained that the 63-year-old businessman conducted “a large-scale investment scam in which a multinational company issued a counterfeit digital currency, allegedly backed by billions of dollars in amber and other gems.” Chen In June last year, he pleaded guilty to one count of conspiracy to defraud wire transfer and one count of tax evasion.
Chen is the owner and CEO of USFIA and six other companies. The U.S. Department of Justice explained in detail that he used fraudulent means to promote and spur investment from July 2013 to September 2015. He convinced investors that the US Foreign Investment Agency is a successful multi-level marketing company that extracts amber and other gems from its mines in the “Dominican Republic” of the United States. , Argentina and Mexico. However, there are actually no landmines. The Ministry of Justice added:
He eventually received approximately $147 million from 72,000 victims, which is one of the largest pyramid projects in the history of the region.
Investors were forced to buy USFIA “packages” allegedly composed of amber and other gems and USFIA “points.” They were told that when the company made an IPO, these points could be converted into USFIA shares, which never happened. Each investment ranges from $1,000 to $30,000. The U.S. Department of Justice also specified that the U.S. Foreign Investment Agency also “provides other bonuses to investors who recruit others to purchase these “packages”, including cash, travel, luxury cars, houses in the Los Angeles area, and EB for immigrant investors. -5 visa.”
Beginning in September 2014, Chen and others replaced points with “jewel coins”. “There are no gems in circulation in any industry, no merchants accept them, and no economic value,” the Justice Department continued:
They falsely advertised these “coins” as legal digital currencies held by company gems. Chen also falsely stated that these “coins” have been widely circulated in the jewelry and financial industries.
In addition, Chen committed tax evasion, and he reported that his total income in 2014 was US$138,015, which was approximately US$4,816,193 at the time. Therefore, he owes the Internal Revenue Service (IRS) $1,885,094-deducting interest and fines. The conclusion of the DOJ notice is:
Judge Walter ordered Chen to repay $1,885,094 to the Internal Revenue Service for tax evasion charges.
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