Unscrupulous crypto trader gets 42 months for fraud

crypto
TL;DR Breakdown
  • An unscrupulous crypto dealer was sentenced to 42 months for running a pyramid scheme.
  • Jeremy Spence was apologetic to his investors for his actions.
  • He was ordered to pay 2.8 million dollars as restitution.

An unscrupulous crypto trader who cheated more than 170 people was convicted and handed 42 months imprisonment On May 11. The Department of Justice sentenced the culprit for running a series of crypto funds that falsely claimed to produce large returns. However, they were making losses and instead worked as a pyramid scheme.

The DOJ stated that Jeremy Spence 25 had solicited millions of dollars by making false representations. They added that Spence’s crypto trading appeared to be very profitable. When, in fact, Spence’s trading had always been unprofitable.”

The DOJ passed the judgment down to Spence by United States District Judge Lewis Kaplan for the Southern District of New York. Spence managed the social media channels known as Coin Signals for an investment scam involving crypto.”

Besides, the court ordered Spence to pay his victims restitution. The restitution will cost over $2.8 million and give three years of supervised release.

In January 2021, agents from the Federal Bureau of Investigation (FBI) placed Spence under custody. Moreover, the Commodity Futures Trading Commission (CFTC) filed separate civil charges against him.

In November 2021, Spence entered a guilty plea to the charge of commodities fraud for his role in a scheme. He admitted defrauding unwitting crypto investors out of more than $5 million.

He created many crypto funds to lure unsuspecting investors from November 2017 until April 2019. He falsely claimed that his funds were making returns, but, in reality, they were making losses. Spence admitted his guilt in the scheme during his plea hearing.

Crypto trader lured his victim through falsification

The DOJ gave an example in which Spence allegedly claimed that one of the funds had generated a return of 148 percent. He posted this message on an active online platform during a particular month to lure targets.

U.S. District Judge Lewis Kaplan, who presided over the case, reportedly said the following,

The thing that shocked me was the ineptitude of the individuals you hoodwinked into investing with you. There are severe repercussions to these stunts, and they are significant.

To make a profit, investors would send cryptos for Spence to make investments. Yet, Spence was never making profits.

His transactions were running at losses. So, he generated phony account balances to conceal that he was losing money. He distributed approximately $2 million worth of crypto in this manner. Besides, Spence made the operations like a Ponzi scheme. He diverted cash from new investors to pay earlier investors.

Spence told Judge Kaplan that he was “mortified” by his behavior to the court. He also apologized to his investors and claimed that he was not qualified to trade the amount he received.

We tried reaching out to Spence’s attorney on his thoughts about the judgment, but he never responded. We are not sure if they will launch an appeal to reduce the sentencing.

Unscrupulous crypto dealers and the hard way

Spence is not the only scammer to face the full wrath of the law. Last year, a Swedish crypto scammer was sentenced to serve 15 years in jail.

According to the DOJ, Roger Nils-Jonas Karlsson operated an economic fraud operation beginning in 2011. He ran his scamming empire until his arrest in Thailand in June 2019.

As per court records, Karlsson convinced victims to invest in his Ponzi scheme, “Eastern Metal Securities.” He was promising his victims “astronomical returns.” The scammer encouraged his prey to invest with digital currencies.

However, Karlsson diverted the monies to his accounts. He used the loot to buy luxurious apartments and a resort in Thailand. Under the sentencing terms, Karlsson gave up this resort in Thailand and other assets and accounts in his name.

Nellius Irene

Nellius Irene

Nellius Irene is a cryptocurrency investor and journalist who has been in the nascent space since 2018. She has researched and written on several crypto-related topics including non-fungible tokens (NFTs), decentralized finance (DeFi), fundraising, mining, etc. Her major focus is covering regulatory events that are capable of shaping the entire crypto ecosystem.

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