\n<\/p>\n
Assistant U. S. Attorneys Carl Brooker, Lisa Sanniti, and Mark Pletcher\u00a0\u00a0\u00a0\u00a0 <\/b><\/p>\n
NEWS RELEASE SUMMARY<\/u>\u2014September 16, 2022<\/b><\/p>\n
SAN DIEGO\u2014 A Los Angeles man was sentenced in federal court today to 38\u00ad months in prison for his participation in BitConnect, a massive fraudulent cryptocurrency investment scheme, which defrauded thousands of investors from the United States and abroad.<\/p>\n
According to court documents, Glenn Arcaro, 44, conspired with others to exploit investor interest in cryptocurrency by fraudulently marketing BitConnect\u2019s proprietary coin offering and digital currency exchange as a lucrative investment. Arcaro and others misled investors about BitConnect\u2019s \u201cLending Program.\u201d Under this program, Arcaro touted BitConnect\u2019s purported proprietary technology, known as the \u201cBitConnect Trading Bot\u201d and \u201cVolatility Software,\u201d as being able to generate substantial profits and guaranteed returns by using investors\u2019 money to trade on the volatility of cryptocurrency exchange markets.<\/p>\n
In truth, however, BitConnect operated a textbook Ponzi scheme by paying earlier BitConnect investors with money from later investors. Furthermore, Arcaro and others ensured up to 15 percent of the money invested into BitConnect went directly into a slush fund to be used for the benefit of the owner and promoters of BitConnect. The BitConnect Ponzi scheme ensnared 4,154 victims from 95 countries making it a true worldwide Ponzi scheme.<\/p>\n
U.S. Attorney Randy Grossman said, \u201cThe U.S. Attorney\u2019s Office for the Southern District of California is committed to ensuring justice for victims of this Ponzi scheme. Putting a technical sheen on a vintage scheme will not stop this office\u2019s pursuit of a just outcome.\u201d Grossman praised the work of FBI\u2019s Cleveland Field Office, as well as IRS-CI, the Financial Investigations and Border Crimes Task Force – a multiagency task force based in San Diego and Imperial counties that is funded by the Treasury Executive Office of Asset Forfeiture.<\/p>\n
\u201cIdentifying and investigating criminals who commit complex financial crimes under the guise of a sound investment strategy are a priority of the FBI,\u201d said Cleveland FBI Special Agent in Charge Gregory Nelsen.<\/p>\n
\u201cThe global reach and thousands of victims Mr. Arcaro impacted underscores the fact that fiscal crimes that combine the allure of cryptocurrency with new technology and a savvy marketing strategy are borderless and often begin through a relationship built on trust, hope, and promise.\u00a0 The FBI, together with our federal, state, and local partners, will continue to work tirelessly to ensure conniving criminals are no longer a threat to any individual or business in our society.\u201d<\/p>\n
\u201cGlenn Arcaro and his co-conspirators created a global web of deception and fraud,\u201d said IRS-CI Special Agent in Charge Tyler Hatcher. \u201cIRS-CI and our law enforcement partners diligently unraveled this web of lies, and today\u2019s sentencing is a reminder that fraud does not pay.\u00a0 You will be caught, and you will go to prison.\u201d<\/p>\n
Arcaro admitted that he earned no less than $24 million from the BitConnect scheme, all of which, according to court documents, will now be repaid to investors in restitution or forfeited to the government. Arcaro took steps to transmit the BitConnect proceeds that he earned to offshore accounts, transform some of the proceeds into precious metals storage, and obtain foreign passports. Arcaro\u2019s goal was to avoid paying federal and state income taxes on his income earned from the scheme and to shield his assets from collection by the Internal Revenue Service.<\/p>\n
Assistant U.S. Attorneys Carl Brooker, Lisa Sanniti, and Mark W. Pletcher of the Southern District of California and Trial Attorney Kevin Lowell of the Criminal Division\u2019s Fraud Section prosecuted the case. The Department of Justice Office of International Affairs and United States Postal Inspection Service provided indispensable assistance to the investigation.<\/p>\n
DEFENDANT<\/u>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Case Number 21CR2542-TWR<\/u>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/b><\/p>\n
Glenn Arcaro\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Los Angeles, CA\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Age: 45<\/p>\n
SUMMARY OF CHARGES<\/u><\/b><\/p>\n
Conspiracy to Commit Wire Fraud\u2014Title 18, U.S.C., Section 1349<\/p>\n
Criminal Forfeiture\u2014Title 18, U.S.C., Section 982<\/p>\n
Maximum penalty: Twenty years in prison, $250,000 fine or twice the gross gain or loss from the offense, whichever is greater; forfeiture and restitution<\/p>\n
AGENCIES<\/u><\/b><\/p>\n
FBI<\/p>\n
IRS Criminal Investigation\u2014Financial Investigations and Border Crimes Task Force<\/p>\n
United States Postal Inspection Service<\/p>\n<\/div>\n