A new York resident is accused of tricking investors into transferring him the equivalent of $4.5 million in cryptocurrencies that he used to bet on offshore gambling sites.
According to a criminal case filed by the US attorney’s office, Douglas Jae Woo Kim, who lives in new York, fraudulently received BTC and ETH worth more than $4.5 million from three investors.
The justice Department alleges that Kim posed as a cryptocurrency trader and requested loans for low-risk investments, in which he says he has already invested between $300,000 and $400,000.
According to the Prosecutor’s office, after receiving the funds, Kim sent either all of them or a substantial amount to the offshore cryptocurrency-supporting gambling sites Nitrogen Sports and Fairlay.
Between October 2017 and may 2020, Kim convinced three investors to transfer 123 BTC, equivalent to about $1.1 million, 15,252 ETH worth about $3.5 million, and approximately $30,000.
Although Kim has promised that investors will get back not only the loans, but also high interest on them, the justice Department says that most of the BTC and all of the ETH will not be easy to repay.
At the moment, only one investor has managed to return their funds. According to testimony obtained by the FBI, none of the investors suspected that their money was being used on playgrounds.
The Department of justice has charged Kim charged with electronic fraud. He appeared in court this week and, if found guilty, faces up to twenty years in prison and a $250,000 fine.
Recall that recently the us Federal Bureau of investigation (FBI) arrested a group of fraudsters from Nigeria, who lured two Chicago firms $17.5 million in bitcoins, posing as accountants.
In addition, the us Department of justice recently accused a resident of Texas of illegally receiving a social payment for employers in the amount of $1.1 million, which he spent on the purchase of cryptocurrencies.