Crypto entrepreneur charged in $150 million rip-off

The U.S. District Court docket for the Japanese District of New York stands within the Brooklyn borough of New York Metropolis on Jan. 18, 2019.

Drew Angerer | Getty Photos

Federal prosecutors on Friday announced charges in opposition to a German businessman, alleging he scammed investors out of greater than $150 million in a crypto fraud scheme.

Prosecutors stated Horst Jicha promoted USI Tech, the corporate he based and helmed as its CEO, as a crypto mining and buying and selling platform “accessible to the average retail investor.” However essentially, Jicha and two unnamed co-conspirators, each USI Tech executives, lured and defrauded traders in a “multilevel marketing scheme,” prosecutors allege.

Authorities stated they arrested Jicha and unsealed an indictment containing 4 costs in opposition to him — securities fraud and conspiracies to commit securities fraud, wire fraud and cash laundering — after he entered the U.S. for the primary time in additional than 5 years on Dec. 23, heading to Miami for trip. He was arraigned in Brooklyn federal court docket Friday morning.

Prosecutors allege that the corporate falsely claimed on its web site, in social media posts and at in-person occasions that traders might earn as a lot as 140% returns on crypto investments made by way of its platform.

Across the spring of 2017, Jicha and his co-conspirators started “aggressively promoting” USI Tech, prosecutors stated. There have been stay occasions, together with one in Valley Forge, Pennsylvania, the place certainly one of Jicha’s co-conspirators claimed USI Tech’s legality had been blessed by “the very top SEC attorney,” in keeping with the indictment.

In 2018, as regulators started scrutinizing USI Tech, prosecutors alleged that Jicha terminated the corporate’s U.S. operations, stopping traders from withdrawing their cash. Since then, round $150 million of that cash has been transferred to accounts managed by Jicha, prosecutors stated Friday.

“It’s always difficult when investors have suffered losses at the hands of certain bad actors,” Marissel Descalzo and David Tarras, Jicha’s attorneys, wrote in a press release. “We look forward to zealously defending the allegations against Mr. Jicha and bringing forth the facts of his involvement with USI Tech in hopes that the bad actors will be brought to justice.”

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