BitConnect CEO and principal promoter pleads guilty to racketeering offenses
BitConnect CEO and principal promoter pleads guilty to racketeering offenses By Angel Di Matteo @shadowargelThe

defendant admitted his involvement in promoting a pyramid scheme run by BitConnect and stealing funds originally belonging to defrauded investors.

***

Glenn Arcaro, who served as a director and one of the main promoters of BitConnect,

pleaded

guilty in court to fraud and promoting a scheme that stole more than $2 billion

.

This was revealed by the U.S . Department of Justice (DOJ) in a report released on September 1, which states that Arcaro accepts responsibility for the crimes perpetrated by BitConnet,

admitting to participating with other executives to take advantage of the growing interest in digital currencies among potential investors to introduce them to an international scam.

Arcaro admits crimes associated with BitConnect

Specifically, Arcaro admitted that he and others lied to investors about the alleged “BitConnect Trading Bot” and “Volatility Software,” the main propositions put forth by the company promising a 1% daily return on invested capital. He confessed that these products did not exist and that they were in fact operating a Ponzi

(Pyramid) scheme, in which the money allocated by new members was used to pay the older ones.

The report released by the DOJ

reads:

“As a result [of such crimes], a large number of people lost enormous amounts of money… The Department of Justice will continue to protect investors and monitor the growing cryptocurrency industry… Let this action… be a warning to scammers. To investors, let what has happened be a wake-up call to safeguard your money and invest it wisely.”

According to the DOJ, Acaro was responsible for a large network of promoters, who promoted a pyramid scheme known as the BitConnect Referral Program

. From this work he earned 15% of each investment capitalized by the loan program administered by the company, and he also received part of the commissions linked to a hidden slush fund.

Both Arcaro and his accomplices avoided paying taxes on the income they were earning in order to conceal their ties to BitConnect,

as well as the illegal activities they were perpetrating. The

case against Arcaro is one of many that the SEC

is

currently investigating, and the case against BitConnect is one of many that the SEC

is

currently investigating

. and the DOJ itself are pursuing BitConnect‘s associated managers and promoters.

The SEC recently indicted BitConnect founder Satish Kubhani on charges associated with scamming and promoting fake financial products to raise a larger amount of capital, including alleged bots and BCC tokens launched to “compensate” victims.

For the same charges also the SEC indicted several BitConnect-related promoters at the end of May this year.

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Source: Bitcoinist

Version by Angel Di Matteo / Bitcoin Journal

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