Nevada Man Pleads Guilty To Fraudulent $722 Million Cryptocurrency Scheme – Regulation


A Nevada man has admitted his role in money laundering solicited for the Bitclub Network, a $722 million fraudulent cryptocurrency scheme. He also pleaded guilty to tax offences.

Bitclub Network Investor Pleads Guilty

The United States Department of Justice (DOJ) announced Thursday that Gordon Brad Beckstead, a 57-year-old from Henderson, Nevada, has pleaded guilty to the Bitclub Network fraud. The announcement details:

A Nevada man today admitted his role in money laundering solicited for Bitclub Network, a $722 million fraudulent cryptocurrency scheme.

The DOJ explained that the Bitclub Network was a fraudulent scheme that ran from April 2014 to December 2019. Its creator and operator, Matthew Brent Goettsche, was charged in December 2019. Silviu Catalin Balaci, Russ Albert Medlin, Jobadiah Sinclair Weeks and Joseph Frank At the same time, Abel was also charged in connection with the scheme.

The fraudsters “requested money from investors in exchange for shares of alleged cryptocurrency mining pools and rewarded investors for recruiting new investors for the plan,” the DOJ described.

Beckstead, a Bitclub Network investor and former CPA, admitted that he conspired with Goettsche and others to launder the money earned through the Bitclub Network.

He also helped prepare Goettsche’s fraudulent federal tax returns for 2017 and 2018, which helped him avoid paying more than $20 million in federal income taxes. According to the DOJ, Beckstead admitted that he knew the returns were fraudulent because they reported no more than $60 million in revenue earned through the operation of the Bitclub Network.

Beckstead pleaded guilty to “one count of conspiracy to commit money laundering and one count of aiding the preparation of a false tax return,” the Justice Department noted.

The money laundering charge carries “a maximum penalty of 20 years in prison and a fine of $500,000, or twice the value of the property involved in the transaction, whichever is greater,” the DOJ clarified, adding that the tax “entails a maximum”. three years in prison and a $100,000 fine.”

What do you think of this case? Let us know in the comments below.

Kevin Helms

Kevin, an Austrian economics student, found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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