Crypto Fraudster Gets Seven Years in Prison for Stealing $90 Million in a Ponzi Scheme
The 24-year-old Australian national – Stefan He Qin – will spend the next 90 months in federal prison for defrauding his customers out of $90 million. The courts also ordered him to forfeit nearly $55 million from the embezzled money.
The Road to Prison
According to a press release from the United States Department of Justice, Stefan Qin received a prison sentence for seven and a half years after stealing nearly $90 million from his clients.
The Australian was in charge of two cryptocurrency investment funds – Virgil Sigma and VQR as their headquarters were in New York. Both companies’ operational structure was to collect money from investors, which later to employ in arbitrage trading strategies. What’s more, they promoted themselves as “market-neutral,” meaning that the volatility of the digital market does not expose their clients to any risks.
Per the marketing reports, Virgil Sigma has had only one month where it did not register profits – March 2017. Qin was also in constant relation with his customers, often bragging about the success of his investment funds. He even reached the Wall Street Journal pages after Virgil Sigma had yielded an annual return of 500% in 2017.
However, it all sounded too good to be true, and “Qin’s investors soon discovered that his strategies weren’t much more than a disguised means for him to embezzle and make unauthorized investments with client funds.”
The 24-year-old actually used the money for his own purposes, such as services, food, and renting a luxurious penthouse apartment in New York. Qin did not stop there – he also used a substantial portion of the investors’ capital to make allocations in other entities that are not related to cryptocurrencies at all.
The investigation revealed that he received a prison sentence of seven and a half years and the court also ordered his investment funds to cease operations. Apart from this jail time, Qin would have to restore almost $55 million of the stolen funds.
Even More Time Behind Bars
While the aforementioned court decision of more than seven years in federal prison might sound like a long time, it is not the largest ever given for crimes involving digital assets.
As CryptoPotato reported, the Swedish resident – Roger Nils-Jonas Karlsson – was sent to prison for 15 years after luring more than 3,500 people into a fraudulent Bitcoin investment scheme.
Assuring investors that their money (mainly in cryptocurrencies) was in safe hands, he used the funds entirely for his personal enrichment, acquiring a resort in Thailand, luxurious condos, and even a racehorse.
Karlsson’s prison sentence could have been longer, but he pleaded guilty to all charges against him. In addition, the US authorities ordered him to forfeit the Thai resort alongside other properties as part of the punishment. He also had to restore all the money he stole from his victims.
Text source: CryptoPotato
