18 months sentence for Bitcoin investment fraud

22 July 2016

Trendon Shavers has been sentenced to 18 months of jail for a bitcoin investment fraud. Apart from the jail sentence the fraudster faces 3 years of supervised release and penalties amounting 1.2 million US dollars for forfeiture and 1.2 million dollars for restitution. The process started in summer 2013 in the case of investors defrauding with the use of the scheme known as Bitcoin Savings and Trust (BCS&T).

As the investigation showed the service launched by Shavers was a ponzi scheme. Facing charges of securities and wire fraud Shavers was expected to be imprisoned for up to forty years. In spring 2015 he confessed no guilt and later in the fall he changed his opinion within the framework of the deal to remit the sentence and reduce the term of imprisonment to 41 months at large.

As noted by a US Attorney, using high-end technologies can still be challenging in view of abuse practiced in the fraudulent activity, making Bitcoin just another instrument for creating old Ponzi schemes. Shavers created an investment pyramid by paying old investors from the funds deposited by the newcomers.

The court heard apologies from the swindler along with his explanation that he was just totally perverted without any possibility for him to overcome that flaw.

According to the investigation reports he illegally misappropriated about 146 000 BTC in the investment fraud service which is about 807 380 US dollars calculated on the average at the time of his service and 97 million US dollars at the press time.

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