US Citizen Sentenced to Prison over $20 million ICO Fraud

0
146
US Citizen Sentenced to Prison over $20 million ICO Fraud

According to a report released on Tuesday by the Department of Justice (DOJ), a man is close to jail as a US court in San Francisco convicted him of millions of dollars in cryptocurrency fraud.

An ICO is a blockchain-based fundraising strategy in which a company drums up capital by minting and selling digital tokens directly to the public. The ICO market is wild and unpoliced, but it’s also lucrative and growing. ICOs in the first five months of 2018 alone raised more than $13.7 billion for 537 companies, according to PwC

Jerry Ji Guo, 33, was sentenced to six months in prison by U.S. District Judge Beth Labson Freeman and to pay nearly $4.4 million in damages after pleading guilty to fraud on the first coin offering (ICO).

During the height of the ICO boom in 2018, Guo acted as an ICO consultant to clients and present himself to provide executive marketing and consultancy services on behalf of the cryptocurrency startups.

Guo did not fulfill his promised duties, but instead misused the customers’ cash and cryptocurrencies. He was accused by a federal grand jury in November 2018.

US Government confiscate San Francisco man client funds

The San Francisco man pleaded guilty to a wire fraud crime in August 2019. He was charged with seven other charges, but the other charges were dismissed. According to the Daily Beast report at the time, Guo could be sentenced to 20 years in prison if found guilty of all charges.

The U.S. government in 2019 received a motion for mandatory forfeiture warrant and an arrest warrant to confiscate Guo’s client funds. According to the final confiscation decision, the US government, with the assistance of Mr. Guo, can now return the stolen property to his victims.

According to the U.S. Department of Justice, the current value of stolen cash and cryptocurrencies is estimated at over $20 million.

US attorney David Anderson said that,“This case shows we can use criminal forfeiture to compensate fraud victims even when cryptocurrency is used in the fraud,” Judge Freeman also ordered Guo to be under the supervision of the authorities for three years after his release from prison.