46-year-old New York resident Patrick McDonnell admitted to stealing funds obtained from his clients instead of investing them in cryptocurrency, Bloomberg reports on June 21.
Per the report, McDonnell - who calls himself the "Coyote of Wall Street" - pleaded guilty to wire fraud on Friday in federal court in Brooklyn.
"I claimed to invest it in virtual currency and spent it on personal expenses."
McDonnell attracted investors to his firm CabbageTech by claiming on social media to have traded over $50 million worth of bitcoin for thousands of clients.
Bloomberg reports that, instead of investing in the interest of his clients, McDonnell appropriated the funds for his own use and spent at least $194,000.
"As alleged, the defendant defrauded investors by making false promises and sending them fraudulent balance statements, hiding the fact that he was stealing their money for his personal use."
Per the terms of a plea agreement, McDonnell will reportedly serve between two and 2 1/2 years in prison.
CabbageTech has been permanently barred for fraud after the United States Commodities Futures Trading Commission won a court order in August of last year.
Earlier this month, the CTFC launched an enforcement action against a reportedly fraudulent $147 million bitcoin investment scheme.
The commission claims that United Kingdom-based Control-Finance Ltd defrauded more than 1,000 investors to launder at least 22,858 bitcoins.
CabbageTech Crypto Scheme Operator Pleads Guilty to Wire Fraud
gepubliceerd op Jun 23, 2019
by Cointele | gepubliceerd op Coinage
Coinage
Vermeld in dit artikel
Recent nieuws
Alles zien
Blockchain Bites: Bitcoin's Run, Uniswap's Hemorrhaging Value, Anchorage's Banking Bid
Bitcoin is nearing all-time highs in price and market cap last set three years ago.
Japan's megabanks to lead experiment with digital yen
We have, in order, Cheese Bank with a $3.3 million theft, Akropolis with its $2 million loss, Value DeFi with a whopping $6 million exploit and finally Origin Protocol's loss of $7 million.
Number of new Bitcoin addresses spikes amid growing FOMO
Japan's three largest banks, as part of a group of 30 private sector actors, are set to collaborate on an experiment with a digital yen.
Not just Wall Street: Quant trader explains why Bitcoin price is going up
Sam Trabucco, a quantitative trader at Alameda Research, believes four general factors are pushing up the price of Bitcoin.