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US Department of Justice charges four in global Ponzi scheme

By Elizabeth Hearst

The United States Department of Justice has charged four members of a global cryptocurrency scheme for fraud and money laundering in the Ponzi scheme. 

Following an investigation by United States Homeland Security, four of the five alleged operators of the AirBit Club were arrested and are due to appear in court on August 18th. The fifth operator was arrested in Panama and is awaiting extradition to the US. 

It is alleged that AirBit Club was used to scam millions of dollars from victims into a global Ponzi scheme, launched as a multi-level marketing club in 2015. 

United States attorney Audrey Strauss described the scheme and said: “As alleged, the defendants put a modern-day spin on an age-old investment scam, promising extraordinary rates of guaranteed return on phantom investments in cryptocurrencies.”

It is alleged that the operators hosted a number of lavish presentations to encourage investors and promised daily returns from cryptocurrency, mining and trading. HSI Special Agent Peter C. Fitzhugh added: “Those arrested today have not only been charged with running a multi-million dollar cryptocurrency investment fund and money laundering ring, but also for spending their victim’s money on luxury cars, jewelry and homes.”

The threads of this scheme started to unravel in 2016, when club members attempted to withdraw money from AirBit Club Online and were met with “excuses, delays and hidden fees amounting to more than 50% of the Victim’s requested withdrawal”. 

In one case, victims were told that in order for them to withdraw funds then they should “bring new blood” into the AirBit Club Scheme. In April 2020, one victim received notice that her account was closed and investment lost due to “execution of financial sustainability”. 

It is alleged that the operators laundered at least $20 Million in proceeds through trusts and bank accounts. 

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