Victims of large-scale investment fraud schemes are expected to receive more than $17 million in damages ordered by US courts.
About 800 people in more than 40 countries around the world will benefit from a federal district court order issued in San Diego late last week.
But this falls short of the estimated 4000 victims from 95 countries left out of pocket by the Ponzi scheme.
BitConnect was a fraudulent cryptocurrency scheme that tricked investors into investing in the company with promises of large profits.
Its “BitConnect Trading Bot” and “Volatility Software” technology are advertised as part of the BitConnect Lending Program, promising guaranteed returns by trading on the volatility of the cryptocurrency exchange market.
In fact, this was all an invention, and the company’s owners simply used the money invested by later investors to pay earlier investors. About 15% was allocated to secret funds used by BitConnect owners and promoters.
But the $17 million figure mentioned in court last week is somewhat short of the $56 million return announced by the DoJ in November 2021. This may reflect the crash in cryptocurrency prices during that time.
It’s also far less than the $2.4 billion BitConnect allegedly stole from investors.
The company’s top promoter, Glenn Arcaro, 44, pleaded guilty to wire fraud conspiracy in September 2021 after allegedly pocketing $24 million from BitConnect’s slush funds.
However, his boss and company founder, Satish Kumbani, reportedly fled his native India and is still on the run. Kumbani was indicted in the United States in February 2022 on charges of conspiracy to commit wire fraud, wire fraud, conspiracy to fix commodity prices, operation of an unlicensed money transfer business, and conspiracy to launder international money. it was done.
If found guilty, he faces up to 70 years in prison.
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