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Law enforcement arrested three men for their participation in a cryptomining scheme that defrauded investors of $722 million.

On December 10, 2019, the U.S. Attorney’s Office for the District of New Jersey announced the arrests of Matthew Brent Goettsche, 37, of Lafayette, Colorado, and Jobadiah Sinclair Weeks, 38, of Arvada, Colorado, on suspicion of conspiracy to commit wire fraud.

It also revealed the arrest of Joseph Frank Abel, 49, of Camarillo, California, who along with Goettsche and Weeks is accused of having offered and sold unregistered securities.

According to court documents, the three men operated a scheme called “BitClub Network” between April 2014 and December 2019. That ploy solicited money from investors for shares in purported cryptocurrency mining pools. The ruse also awarded investors who recruited new investors.

Goettsche, Weeks and Abel promoted their scheme by providing false and misleading figures that they claimed were earnings from their cryptomining pools.

In particular, Goettsche frequently told his co-conspirators to manipulate the earnings sometimes on a daily basis despite receiving warnings from Weeks and others.

The three defendants also traveled around the world in a bit to sell BitClub Network shares, securities which they had not registered with the U.S. Securities and Exchange Commission.

U.S. Attorney Craig Carpenito put the three men’s crimes into perspective for a statement released by the U.S. Department of Justice:

The indictment describes the defendants’ use of the complex world of cryptocurrency to take advantage of unsuspecting investors. What they allegedly did amounts to little more than a modern, high-tech Ponzi scheme that defrauded victims of hundreds of millions of dollars. Working with our law enforcement partners here and across the country, we will ensure that these scammers are held to account for their crimes.

Each of the defendants face a maximum penalty of 20 years in prison a $250,000 fine for the wire fraud conspiracy charge along with five years in prison and another $250,000 fine for the unregistered securities charge.

Local law enforcement arrested a fourth defendant, Silviu Catalin Balaci, in Germany. Two other defendants remained at large at the time of this writing.