Dear Clients,
While we await news regarding this case we continue to publish parts of the indictment. It illustrates how irresponsible individuals abuse people’s trust and carefully devise fraudulent projects. This results in even highly educated individuals in the field of Crypto becoming victims of cunning fraudsters.
Quoting parts of the indictment:
XII. In or around June 2017, WEEKS emailed GOETTSCHE and MEDLIN a business opportunity involving BCN, and observed: “We (Bitclub) can’t just ‘sell’ people mining hardware (shares) in Bitciub and then not use the money to buy equipment. Its not right. Bitclub makes 20% regardless of the price.”
XIII. In or around September 2017, GOETTSCHE and MEDLIN exchanged emails regarding a new scheme to encourage current BCN investors to reinvest their shares into another BCN investment product. GOEYTTSCHE suggested that BCN manipulate mining earnings:
“We close the current pool to new shares, we call it the Early Adopters Pool or Legacy Pool or some shit like this. We continue to pay out for the total of the life of the pool but no more partial shares or new shares allowed in. This means the day we close it we have 1,000 days that we calculate out and put on autopilot. Here is my current plan… (in my head)
1. Limit sales by the hour to do $50 mil per month
2. Drop mining earnings significantly starting now
3. We retire RAN!! (rich as fuck)
MEDLIN responded to this plan: “I like it. Call me when you can.”
COUNT TWO
(Conspiracy to Offer and Sell Unregistered Securities — 18 U.S.C. § 371)
- Paragraphs 1 and 4 of Count One of this Indictment are re-alleged and incorporated herein.
- At times relevant to Count Two of this Indictment:
a. Defendant JOSEPH FRANK ABEL promoted BCN.
b. BCN held itself out as a profit-seeking business venture. Investors paid a $99 membership fee to be a part of BCN arid then were provided the option to pay additional money for shares in what BCN purported
were three mining pools. According to BCN’s website, investors could earn passive income” through investment in the pools. Specifically, BCN represented:
You can purchase a share in 3 different mining pools and all Bitcoin mined from each pool will be paid arid shared with all members eligible for the pool. You pay either $500, $1,000, or $2,000 worth of Bitcoin for a share of the mining pool. With your purchase you will receive Bitcoin for 600 days! A percentage of all Bitcoin mined and paid to you will be used to pay for mining costs and to purchase new mining equipment.
*No Sponsoring Required to Earn Mining Pool Payouts
c. BCN further described the different investment options:
Mining Pool #1 — –Each share cost $500 USD that will be used to purchase new Bitcoin mining servers. All Bitcoin earned will be split among all members of this pooi and paid out daily. Each share earns 50% profit with the other 50% being used to fund the mining operation and to purchase additional mining shares.
Mining Pool #2 -Each share cost $1,000 USD and just like Pool #1 the total Bitcoin earned will be split among all members in the pool and paid out. Each share earns 60% profit with the other 40% being used to fund the mining operation and to purchase additional mining shares.
Mining Pool #3 –Each share cost S2,000 USD and the total Bitcoin earned will be split among all members in the pool and paid out. Each share earns 70% profit with the other 30% being used to fund the mining operation and to purchase additional mining shares.
To be continued.
Zoran Miljakovic
Attorney at Law