The owners of EmpowerCoin, ECoinPlus and Jet-Coin allegedly swindled $40 million from victims, and attempted to "cover their tracks and destroy evidence" when they were about to be exposed.
Four defendants are facing up to 20 years in prison each for their alleged role in a "sophisticated scheme to steal assets from investors."
According to the U.S. Justice Department, Dwayne Golden, Gregory Aggesen, and Marquis Demacking Egerton owned and operated EmpowerCoin, ECoinPlus and Jet-Coin between April and August 2017.
They have been charged with conspiracy to commit wire fraud and money laundering. Golden and Aggesen — along with a man called William White — also face allegations of conspiracy to obstruct justice, obstructing justice and tampering with evidence.
The crypto projects "fraudulently promised investors and potential investors guaranteed fixed returns on virtual currency investments," prosecutors said.
Victims were told that the gains were achieved through trading operations that took place overseas — and they were encouraged to part with cash or Bitcoin in order to get involved.
However, the defendants allegedly used these funds to repay other investors — or simply stole them for their own financial gain.
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$40M Lost to Scammers
Overall, EmpowerCoin, ECoinPlus and Jet-Coin are said to have received more than $40 million from investors… and the companies collapsed without even engaging in any trading activities. U.S. Attorney Breon Peace said:
"As alleged, the defendants engaged in a sophisticated scheme that preyed on unsuspecting investors nationwide with false promises of guaranteed returns and virtual currency trading opportunities. When the companies collapsed and their criminal conduct was about to be exposed, the defendants attempted to cover their tracks and destroy evidence. The scams may have been online and virtual, but these charges are very real."
Peace also vowed to bring criminals to justice "who view cryptocurrency as a new frontier to perpetrate old-fashioned crimes of fraud and money laundering." Meanwhile, the FBI's assistant director-in-charge, Michael J. Driscoll, warned:
"Whether we're dealing with virtual currency or cold-hard cash, schemers continue to capitalize on investors' best intentions and pocket their ill-gotten gains."
Anyone who was a customer of EmpowerCoin, ECoinPlus and Jet-Coin are being urged to get in touch if they would like to file a complaint.
