Cryptocurrency rocked by massive Bitcoin fraud

US prosecutors have arrested three men while investigating an alleged $722 million Bitcoin scam.

The Justice Department has branded the activities of the ‘BitClub Network’ as a “high-tech Ponzi scheme” that lured victims with fake Bitcoin mining profits while taking money from investors who were rewarded for recruiting new members.

Apparently preying on people across the globe, the scheme is understood to have operated from April 2014 until recent days from offices in New Jersey, according to an indictment signed by US Attorney Craig Carpenito.

The arrested men are 37-year-old Matthew Brent Goettsche of Lafayette, Colorado, Jobadiah Sinclair Weeks, 38, of Arvada, Colorado, and 49-year-old Joseph Frank Abel, of Camarillo, California. Goettsche and Weeks were charged with conspiracy to commit wire fraud, while Abel and Weeks were charged with conspiracy to offer and sell unregistered securities.

The BitClub Network’s Jobadiah Weeks pictured with Sir Richard Branson in 2016

The BitClub Network’s Jobadiah Weeks pictured with Sir Richard Branson in 2016

Detectives confirmed they are still conducting a manhunt for two further defendants whose identities are being withheld.

“The indictment describes the defendants’ use of the complex world of cryptocurrency to take advantage of unsuspecting investors,” Carpenito said.

“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.”

Hoodwink

FBI officers spearheading the investigation claim the gang were using an array of complex methods to hoodwink victims into believing they were part of a get-rich-quick club.

“Those arrested today are accused of deploying elaborate tactics to lure thousands of victims with promises of large returns on their investments in a Bitcoin mining pool…

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