Ponzi schemes have become a part and parcel of the crypto ecosystem. However, the regulators and law enforcement aren’t far behind as they sooner or later, get hold of the ones behind the scams and the hacks. The latest news pertaining to the BitClub network Ponzi scheme stands as substantial proof.
The Confession
Back in December of 2019, the prosecutors of the United States took in 3 men with regard to BitClub Network’s $772 million crypto Ponzi scheme. On Thursday, one out of the three others arrested, Joseph Frank Abel confessed before the District Judge Clair C. Cecchi of the United States. The Internal Revenue Service [IRS] posted an announcement on its official website giving out insights pertaining to the hearing that took place via video conference.
As per the IRS, Abel reportedly agreed to have conspired to “offer and sell unregistered securities and to subscribing to a false tax return in connection with his role in the BitClub Network.”
Additionally, apart from the BitClub Network case, Abel also confessed to another accusation of taking part in subscribing to a false tax return in 2017. While Abel from California has affirmed his involvement in the case, the other defendants, Matthew Brent Goettsche, Russ Albert Medlin, Jobadiah Sinclair Weeks are yet to be proven guilty until the court says so. Abel will reportedly face a maximum of five years in prison starting from January 2021 along with a fine of $250,000. The website further read,
“The tax charge to which Abel pleaded guilty carries a maximum penalty of three years in prison and a fine of $100,000.”
The BitClub Network was in troubled waters after the platform carried out a Ponzi scheme for almost five years from 2014 to 2019. During this period the platform extracted money from its investors in return for shares of the exchange. Abel revealed that he had formulated videos and even went on to post it on the internet, particularly about the BitClub Network. Even though the platform operated in the United States, the accused marketed the BitClub Network in Asia, Africa as well as Europe.