- The former promoter of BitConnect Ponzi scheme has pled guilty to defrauding thousands of investors.
- The court has asked him to refund the $24 million he earned in the process to investors.
Glenn Arcaro, the former director and promoter of the BitConnect Ponzi scheme, has pled guilty to fraud charges. The former director pled guilty before US Magistrate Judge Mitchell Dembin in San Diego in connection to his role and now awaits sentencing scheduled for the 15th of November.
The US Securities and Exchange Commission (SEC) charged BitConnect, along with its founder Satish Kumbhani, the former director, and Future Money Ltd. over the Ponzi scheme. The accused are facing charges of running illegal and unregistered securities offerings.
Former BitConnect director pleads guilty to Ponzi Scheme
As the legal saga continues, the Department of Justice (DOJ) has revealed in a report published on the 1st of September that Arcaro has pled guilty. The former director and promoter admitted responsibility for conspiracy to commit wire fraud through the BitConnect Ponzi scheme.
The DOJ stated:
Glenn Arcaro of Los Angeles pleaded guilty today in federal court for his participation in a massive conspiracy involving BitConnect, a cryptocurrency investment scheme, which defrauded investors from the United States and abroad of over $2 billion. The BitConnect scheme is believed to be the largest cryptocurrency fraud ever charged criminally.
Arcaro used social media to reach a larger pool of investors who fell victim to the BitConnect Ponzi scheme.
In addition, the DOJ press release said that Arcaro admitted to conspiring with others to “exploit” investors through fraudulent marketing of BitConnect’s proprietary coin offering and crypto exchange as a profit-making investment.
In addition, Arcaro confessed to conspiring with others to deceive investors about the company’s purported proprietary technology “BitConnect Trading Bot and Volatility Software.” The defendants convinced investors that the proprietary technology would generate returns after they use their money to trade on the volatility of crypto exchange markets. However, BitConnect operated a Ponzi scheme where the early comers are paid with money invested by the latter investors.
Arcaro leveraged on investors’ crypto interest
Commenting on the BitConnect Ponzi scheme matter, the Acting US Attorney Rand S. Grossman of the Southern District of California said Arcaro took advantage of investors’ interest in the crypto space. He added:
The Department of Justice will continue to protect the investing public and scrutinize the burgeoning cryptocurrency industry. To those who would be next in line to defraud the investing public, let this action by the Department of Justice stand as a stark cautionary tale. To the investing public, let this also serve as a cautionary tale to safeguard your money and invest wisely.
The DOJ further revealed that Arcaro earned up to 15 percent into BitConnect’s lending program. At the same time, he got payments for all investments through a “slush” fund.
Special Agent in Charge of the case, Eric Smith of the FBI’s Cleveland Field Office, also commented on the ongoing issue. Smith referred to the fact that Arcaro has accepted responsibility for all his fraudulent actions. The FBI executive said the former director took investors’ money while deceiving them to expect exorbitant returns.
As Arcaro awaits sentencing later this year, the court has ordered him to pay the money he earned from the fraudulent acts. Specifically, the former director will repay $24 million to the affected investors.