US authorities are charging a German businessman for allegedly operating a crypto pyramid scheme that defrauded about $150 million from investors.
In a new press release, the U.S. Attorney’s Office for the Eastern District of New York is accusing Horst Jicha of securities fraud and conspiracies to commit securities fraud, wire fraud and money laundering for running a multi-million-dollar crypto scam.
According to federal prosecutors, the German national co-founded and led USI Tech, an online platform that “purported to make cryptocurrency investments easy and accessible to the average retail investor.” But instead of making legitimate investments in digital assets, the firm allegedly ran a multi-level marketing scheme designed to encourage investors to recruit other investors and get them to buy products promoted as cryptocurrencies.
“In 2017, Jicha brought USI Tech to the United States and aggressively marketed it to US retailers on social media and through in-person presentations in which he falsely guaranteed high returns on investments and made false claims about the legality of the platform’s investment offerings.”
Per federal prosecutors, USI Tech abruptly shut down its US operations after attracting scrutiny from regulators in early 2018, leaving investors staring at millions of dollars in losses.
“Much of the missing money – Ether and Bitcoin valued at approximately $150 million as of the date of his arrest – was sent to cryptocurrency deposit addresses controlled by Jicha after USI Tech ceased operations.”
Jicha fled the US after halting USI Tech’s operations in the country and managed to stay away for half a decade but was arrested in December 2023 while trying to go on a vacation in Miami, Florida.
Says FBI Assistant Director-in-Charge James Smith,
“Too often honest investors fall victim to schemes surrounding emerging financial opportunities. Horst Jicha allegedly advertised a platform that made cryptocurrency investing simple and more accessible to investors, with guaranteed returns. In reality, the platform was just a facade, and when questions arose, Jicha stole millions of his investors’ money and fled the country. No matter how long it takes, the FBI will continue to bring to justice criminal financial fraudsters.”
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Source: https://dailyhodl.com/2024/01/23/us-government-charges-german-national-for-allegedly-running-150000000-crypto-scam/