The operators of a worldwide cryptocurrency-based Ponzi scheme are charged with fraud and money laundering following a U.S Homeland Security Investigations probe.
In line with a recent announcement from the United States Department of Justice, four of the five alleged operators of AirBit Club, that allegedly netted tens of million dollars from victims, were arrested and due to appear in court on 18th Aug., while the 5th was arrested in Panama and is awaiting extradition to the United States.
The AirBit scheme was launched earlier in 2015 and sold as a MLM club within the cryptocurrency ecosystem. The defendants purportedly hosted lavish presentations to encourage investors to spare cash, promising guaranteed daily returns from crypto mining and trading.
While a web portal for investors did indeed show these “profits” build up, there was actually no cryptocurrency mining or trading taking place. Instead, the monies deposited were spent on luxury goods & real estate, and were allegedly employed to finance even more extravagant presentations to lure in additional victims.
As early as 2016, AirBit club members wishing to withdraw proceeds were met with excuses, delays and hidden fees, and reportedly told that they need to recruit new members if they wanted to receive the returns.
The defendants also tried to hide the scheme and their involvement by requesting membership payments in cash, allegedly laundering a min of $20 Mln of proceeds via various trusts and bank accounts, and removing negative data about the scheme from the web.
As reported last month, one member of another early cryptocurrency-based Ponzi scheme that summed $722 Mln pled guilty to counts of wire fraud and selling unregistered securities.