Cryptocurrency scams have been prevalent in the industry since its inception and several people have lost their holdings to scammers and fraudsters. In a new turn of events, one such scammer has been caught and sentenced by a court in the United States.
Just recently, Patrick McDonnell, was prosecuted by a US Magistrate court for scamming multiple people of hundreds of thousands of dollars in Bitcoin by using a fake company.
The fraudster, who was called ‘evil’ by Judge Nicholas Garaufis was found guilty over the weekend for defrauding investors of their money using a company called ‘CabbageTech’. The fraudulent activities took place between 2014 and 2018, right on the cusp of the Bitcoin boom. The 47-year-old McDonnell told his victims that he would buy and trade virtual currencies [esp. Bitcoin] if they invested in his made-up organization. He conducted his business from Staten Island and ensured that he used fake names and masks at all times.
Multiple people had invested in McDonnell’s company with one paying close to $170,000 in BTC. This particular victim released a tell-all letter to the court which described the steps taken to McDonnell to loot him off his savings. The scammer had used the pseudonym ‘Jason Fleck’ to call the investors multiple times for a chance to be a part of ‘CabbageTech’.
The victim had initially paid $250 on a trial basis but ‘Fleck’ wanted more to further his malicious cause. The letter provided by the victim stated that he brought another $25,000 worth of cryptocurrencies which he invested in the aforementioned company.
McDonnell’s website showed that the man’s investment had multiplied to $100,000, all of which was pocketed by the scammer. Making the ruling on the case, Judge Nicholas Garaufis said:
“You are evil… And these people are injured. I have little sympathy for this defendant.”
Post the judge’s decision, McDonnell pleaded guilty and expressed remorse at his actions. He claimed that he knew he had hurt a lot of people by lying to them and will do everything to turn over a new leaf.
McDonnell had a run-in with the law earlier too when the United States CFTC had initiated a lawsuit against him in 2018. The regulatory body revealed that CabbageTech had scammed just above $11 million from prospective suitors. The CFTC had then decided to issue a penalty on $1.3 million on McDonnell although the maximum amount was much heftier.
The fraudster had broken several subsections of the Commodity Exchange Act and the latest court decision was conceptualized from that.
The presiding judge, as well as the CFTC, have both stated that no form of scams will be tolerated with the US now having the technology to lock-in on digital asset frauds.