A trader on Localbitcoins and Paxful has pleaded guilty to charges in connection with a couple of bitcoin scams. The US Justice Department claims the trader knowingly sold bitcoin to victims of fraudulent schemes.
Bitcoin Trader Facing Jail Time
The U.S. Justice Department (DOJ) announced last week that a Boston man has pleaded guilty in federal court to his role in two bitcoin fraud schemes. Austin Nedved pleaded guilty to aiding and abetting wire fraud and money laundering conspiracy, ”the DOJ detailed, adding that the 29-year-old man“ is currently in custody serving a separate fraud conviction. ”The announcement says:
Nedved admitted he ran a business where he bought and sold digital currencies, including bitcoin, for cash. Nedved advertised its services under the screen name ‘usmc1991’ over Localbitcoins.com and Paxful.com.
The Justice Department described it as “aiding and abetting romance and lottery schemes targeting vulnerable victims.” In romance schemes, victims believe they are in love with the scammers and send money aboard bitcoin. In lottery schemes, victims believe that “they can get lottery gains or substantial government grants by sending cash for fees or administrative expenses to the fraudsters,” the DOJ described.
At the end of 2017, a scammer stood as an American owner of an oil company and managed to make a 78-year-old fall in love with him. Having never met in person, he agreed to marry her. The scammer then told her that his oil company had “experienced an accident abroad where people had died, and that he needed money to settle obligations arising out of the accident with a foreign government.” He convinced her that unless she sent him some bitcoins to pay the settlement, he would not be able to return to the United States and marry her.
The victim, who had never bought bitcoin before, contacted Nedved in June 2018. They met at a car park in Maine and bought her about $ 100,000 worth of BTC with cash. Nedved then transferred the coins to a scammer-controlled wallet.
The DOJ claimed that when Nedved received $ 100,000 from the 78-year-old woman, he knew she was a victim of a romance scam. Nevertheless, he and his co-conspirator took another $ 40,000 from her. According to the DOJ:
Despite knowing or being deliberately blind to the fact that his customers were victims of fraud, Nedved sold them bitcoin so they could send money abroad to the fraudsters.
In total, Nedved and his co-conspirators sold more than $ 630,000 worth of BTC to victims of bitcoin scam, the DOJ claimed, claiming they knew “the cash amounted to romance and lottery scams and illegal activities others. ”
The Justice Department explained “The allegations of aiding and abetting wire fraud provide for a sentence of up to 20 years in prison, three years supervised release and a fine of up to $ 250,000 or twice the gain or loss gross, whichever is greater. ”In addition,“ The charge of money laundering conspiracy provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $ 500,000 or twice the value of funds linked to the financial transactions that were the object of a conspiracy. ”
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