Crypto entrepreneur charged in $150 million scam
The U.S. District Court for the Eastern District of New York stands in the Brooklyn borough of New York City on Jan. 18, 2019.
Drew Angerer | Getty Images
Federal prosecutors on Friday announced charges against a German businessman, alleging he scammed investors out of more than $150 million in a crypto fraud scheme.
Prosecutors said Horst Jicha promoted USI Tech, the company he founded and helmed as its CEO, as a crypto mining and trading platform “accessible to the average retail investor.” But in actuality, Jicha and two unnamed co-conspirators, both USI Tech executives, lured and defrauded investors in a “multilevel marketing scheme,” prosecutors allege.
Authorities said they arrested Jicha and unsealed an indictment containing four charges against him — securities fraud and conspiracies to commit securities fraud, wire fraud and money laundering — after he entered the U.S. for the first time in more than five years on Dec. 23, heading to Miami for vacation. He was arraigned in Brooklyn federal court Friday morning.
Prosecutors allege that the company falsely claimed on its website, in social media posts and at in-person events that investors could earn as much as 140% returns on crypto investments made through its platform.
Around the spring of 2017, Jicha and his co-conspirators began “aggressively promoting” USI Tech, prosecutors said. There were live events, including one in Valley Forge, Pennsylvania, where one of Jicha’s co-conspirators claimed USI Tech’s legality had been blessed by “the very top SEC attorney,” according to the indictment.
In 2018, as regulators began scrutinizing USI Tech, prosecutors alleged that Jicha terminated the company’s U.S. operations, preventing investors from withdrawing their money. Since then, around $150 million of that money has been transferred to accounts controlled by Jicha, prosecutors said Friday.
“It’s always difficult when investors have suffered losses at the hands of certain bad actors,” Marissel Descalzo and David Tarras, Jicha’s attorneys, wrote in a statement. “We look forward to zealously defending the allegations against Mr. Jicha and bringing forth the facts of his involvement with USI Tech in hopes that the bad actors will be brought to justice.”
WATCH: How bitcoin lost by winning
Don’t miss these stories from CNBC PRO:
