A 35-year old Romanian programmer has pleaded guilty to his part in a massive Bitcoin ponzi scheme.

According to the United States Attorney’s Office for the District of New Jersey, Silviu Catalin Bacali, a 35-year old Romanian programmer, has pleaded guilty to his part in an alleged $722M USD Bitcoin (BTC) Ponzi scheme. 

Bacali was arrested by German police in December 2019, and charged with conspiracy to commit wire fraud and conspiracy to offer and sell unregistered securities. He is now facing up to five years in prison and a fine of up to $250,000 USD. 

His alleged accomplices, Matthew Brent Goettsche, Russ Albert Medlin, Jobadiah Sinclair Weeks, and Joseph Frank Able, have also been charged for their parts in the fraud in the United States. 

“On the backs of idiots”

According to prosecutors, the scheme ran from April 2014 to December 2019, with investors handing over money for shares in purported cryptocurrency mining pools. In true Ponzi-style, the scheme also rewarded members for recruiting more investors. 

Despite offering investors the choice of investing in three mining pools, Bacali has admitted that he was only aware of one mining pool in operation with the BitClub Network, and prosecutors have presented communications, between Goettsche and Balaci, in which they refer to fake mining earnings and call the target audience of the BitClub Network “dumb”, refer to investors as “sheep”, and said they would be “building this whole model on the backs of idiots.”

Apparently, there is evidence that Bacali had initially objected when he received orders to artificially inflate daily mining earnings by 60%, but he nonetheless went ahead with it and is now being charged as part of a scheme that is thought to have defrauded at least $722 million worth of Bitcoin (BTC) from investors. 

AYO.NEWS says:

On the one hand it’s good to see the crooks from the ‘Wild West’ days of crypto being brought to book, but on the other it’s quite unsettling to learn just how vast the scale of fraud being committed was. 

Staying with crypto crime, earlier this week we reported that Willie Breedt, the alleged mastermind of a $16.3 million crypto fraud, had been tracked down in South Africa and declared bankrupt.

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