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Crypto Conman Sentenced: Investors Duped in $350K Scam—Here’s How

Crypto Conman Sentenced: Investors Duped in $350K Scam—Here’s How

Samuel Edyme
by Samuel Edyme
10 months ago
·
Posted in Crypto News
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

The US Department of Justice has announced the sentencing of Michael Joseph McElhiney, a Spokane resident, to over three years in federal prison for operating a fraudulent crypto investment scheme. The fraud, which spanned over a year, defrauded multiple investors of more than $350,000.

The sentencing, handed down by United States District Judge Thomas O. Rice, includes 41 months in federal prison, three years of supervised release, and restitution totaling $326,119. McElhiney was immediately remanded to federal custody following the hearing.

Related Reading: Australia To Rein In Crypto ATMs Amid Growing Laundering Worries

The Scamming Tactics

The fraudulent scheme revolved around a fake crypto investment fund, MAC Blockchain Solutions. McElhiney lured investors by presenting himself as an “experienced operator” of a successful crypto investment fund, promising lucrative returns from investments in emerging cryptocurrencies, Ethereum staking, and liquidity pools.

However, according to the US DoJ report, the promised crypto investments were never made, and the funds were instead used for McElhiney’s expenses, including gambling.

The agency further revealed that McElhiney targeted victims through personal encounters and online interactions, including meeting individuals via Uber rides, dating apps, and video games such as Call of Duty” under the username “Bing Bong.”

His strategy often involved developing personal relationships to gain trust before soliciting investments. Victims were provided with “fabricated data” through a platform called Coin.FYI, which falsely displayed progress and growth in their supposed investments.

Furthermore, investors were promised that they could liquidate their investments anytime and receive guaranteed returns. In reality, the funds were “misappropriated” for McElhiney’s personal use.

The scheme extended beyond cash, with rare art and precious metals among the assets defrauded. When victims attempted to withdraw their investments, McElhiney resorted to deceit, citing fabricated excuses such as security breaches, theft, and withdrawal delays.

Despite victims’ demands for their funds, McElhiney continued to perpetuate the scheme by presenting false scenarios, further exploiting the trust of his investors.

Commentary From Authorities

US Attorney Vanessa Waldref expressed her devastation for the victims who suffered financial and emotional losses due to McElhiney’s actions. Wadref noted:

I’m devastated for the victims who suffered financial and emotional consequences of Mr. McElhiney’s scheme, and am grateful for the skilled investigators with Homeland Security Investigations and the Spokane Police Department and dedicated prosecutors in my office that uncovered this scheme and worked diligently to hold Mr. McElhiney accountable for his actions.

Meanwhile, Matthew Murphy, acting Special Agent in Charge for Homeland Security Investigations in Seattle, highlighted the sentencing as a warning against fraudulent schemes.

Related Reading: Celsius Founder Alexander Mashinsky Pleads Guilty To $4.7 Billion Fraud Charges

He noted McElhiney’s exploitation of digital currency to deceive investors and reaffirmed the dedication of law enforcement to pursue such cases, irrespective of the platforms or technology involved.

The global crypto market cap value on TradingView
The global digital currency market cap value on the 1-day chart. Source: TradingView.com

Featured image created with DALL-E, Chart from TradingView

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
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Samuel Edyme

Samuel Edyme

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Edyme is a writer, a content writer that specialises in writing about the crypto realm. Asides Bitcoinist and NewsBTC, Edyme's writing has been featured in top sites such as Blockchain.News, CoinMonk, Blockchain Reporter, Bitcoin Insider among others.

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