Maksim Zaslavskiy of the cryptocurrency Recoin was sentenced to 18 months in prison for lying to investors

At one point Paris Hilton and boxer Floyd Mayweather got on the bandwagon touting ICOs.

Maksim Zaslavskiy, a computer programmer from Sheepshead Bay with masters’ degrees in finance and law, got into this wild-west of Wall Street two years ago when he launched an ICO for Recoin, which was intended to help him buy real estate. He issued a slew of false and misleading statements about the ICO, which he claimed was backed by property investments in the U.S. and overseas and led by a team of experienced real estate professionals.

Later, he switched to marketing a coin that he described as an “exclusive and tokenized membership pool” hedged by diamonds. That wasn’t true, either.

Still, mania for all things crypto was so intense during the summer of 2017 that about 1,000 investors took the bait and invested at least $300,000 in Zaslavskiy’s ICOs.

His attorney, Mildred Whalen of the Federal Defenders of New York, argued that Zaslavskiy refunded as much money as he could before PayPal froze his customers’ accounts over concerns that payments for ICOs were made with stolen or fraudulent credit cards.

Zaslavskiy became the first person charged criminally with ICO fraud when federal prosecutors brought a case against him in 2017 and he pleaded guilty last year to conspiracy to commit securities fraud. Zaslavkiy is a native of the USSR who immigrated to New York in 1991 with his family when he was 12.

He told federal Judge Raymond Dearie he was sorry for doing things he knew were wrong.

“At no point am I a thief,” he insisted in Brooklyn federal court Monday morning.

“You are a thief,” Dearie replied. “You took something that didn’t belong to you under false pretenses.”

Assistant U.S. Attorney Julie Nestor observed that cases like Zaslavskiy’s are “a dime a dozen,” so a stiff sentence was necessary to send a message other fraudsters in the cryto-currency world.

Judge Dearie agreed.

“This is a very unusual case for a lot of reasons. It involves new technologies and new currencies,” he said. “But there is nothing new about lying or flagrant fraud.”

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