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.
Overt Acts
6. In furtherance of the conspiracy and to effect the object of the conspiracy, the Promotion Co-Conspirators committed and caused to be committed the following overt acts, among others, in the District of New Jersey and elsewhere.
a. In or around September 2014, MEDLIN exchanged emails with an individual about BCN, including whether BCN was required to register its shares with the SEC.
b. In or around January 2015, BALACI informed GOETTSCHE that the artificially high mining payouts that BCN was purportedly making to its early investors, which was done to promote further investment in SON, were not sustainable:
We started paying a shitload of money, totally unsustainable amount! That was because you wanted to attract people initially. We are still paying unsustainable amounts each single day, they are still high! Amounts have constantly dropped every day with minor jumps up. But as it stands now, we still pay a lot more than what should be paid if we were to do it in a sustainable mariner. Keep in mind that only 40% is generating mining commissions (well, 40% is allocated to mining the rest being commissions for binary and levelup). So, as a conclusion, based on the mining allocation % and time frame of the share validity I think the payments are still unsustainable and too high.
In response, GOETTSCHE instructed:
Ok well, lets just continue to back it down gradually… We need a big catalyst because we want people to be buying right now in droves while the price is low so once this email thing is ready we will come up with a good campaign. The key is to grow very fast over the next 90 days and then hope the price shoots up while keeping the mining relatively the same.
c. In or around February 2015, BELACI and GOETTSCHE discussed the need to provide its investors and potential investors purported “proof’ that BCN was mining bitcoin to promote further investment in SON:
GOETTSCHE: all we need is proof man
GOETTSCHE: don’t need a rock solid plan
GOETTSCHE: just proof
BALACI: will write a doc today
BALACI: on how members can check proof RIGHT now!
BALACI: based on the address you sent me
BALACI: will write a step-by-step
BALACI: with screenshots
GOETTSCHE: think of it like this… for every 10k we spend in proving our mining we make 20k back
BALACI: I do have one request also
BALACI: past middle of Feb and nothing was paid from that 50k bonus… I promised some of it downline also to motivate people to meet the deadline! Please send like 28.5k (half of the bonus + 3.5k from the last payment).
GOETTSCHE: wasn’t that bonus for a working pool?
BALACI: you are shitting me, right?
BALACI: the pool was done like on 20th Jan
BALACI: you inspected it also, it was live
BALACI: working
BALACI: mining power was missing which still is
GOETTSCHE: I guess our definition of “working’ differs
BALACI: not my fault for that
BALACI: what?
GOETTSCHE: can I get someone to use it?
BALACI: dude, I do software I do not make mining power appear out of thin air
To be continued…
Zoran Miljakovic
Attorney at law