The U.S. Justice Department will sell off $57 million worth of cryptocurrency it seized as part of a massive Ponzi scheme case against a man who promoted the offshore crypto lending program BitConnect, authorities said Tuesday.
The Justice Department said the liquidation of the cryptocurrency follows “the largest single recovery of a cryptocurrency fraud by the United States to date.
Pursuant to court order, the U.S. Attorney’s Office for the Southern District of California, in conjunction with the U.S. Postal Investigative Service, will begin liquidation of approximately $57 million in cryptocurrency (at current estimated prices) seized from the top North American promoter of BitConnect. This liquidation is believed to be the largest single recovery of cryptocurrency for victims to date.
On September 1, 2021, Glenn Arcaro, 44, of Los Angeles, pleaded guilty 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.
As part of his plea agreement, Arcaro admitted that he earned no less than $24 million from the BitConnect fraud conspiracy, all of which, according to court documents, he has agreed repay to defrauded investors. The order entered on November 12, 2021, begins the process of making those victims whole by liquidating the fraud proceeds in Arcaro’s possession—the vast majority of which were in the form of cryptocurrencies, including Bitcoin, Ethereum, Litecoin, Dash, and several others.
Acting U.S. Attorney Randy S. Grossman praised the work of the prosecutors and law enforcement agencies handling this matter, including the FBI’s Cleveland Field Office, as well as, more locally, IRS-CI, the Financial Investigations and Border Crimes Task Force (the “FIBC”—a multiagency Task Force based in San Diego and Imperial Counties, funded by the Treasury Executive Office of Asset Forfeiture), who are investigating the matter, and the U.S. Postal Investigative Service in the Southern District of California who is liquidating the cryptocurrency.
All investor victims of the BitConnect fraud are encouraged to visit the following webpage – https://www.justice.gov/usao-sdca/us-v-glenn-arcaro-21cr02542-twr for information on their rights as a victim, the ability to submit a victim impact statement, and to identify themselves as a potential victim.
Arcaro’s sentencing is scheduled to occur on January 7, 2022, before U.S. District Judge Todd W. Robinson.
