Two Estonian citizens Sergei Potapenko and Ivan Turygin were detained in Tallinn (Estonia), suspected of crypto-fraud for $ 575 million and conspiracy to launder money.
It was reported by Reuters, citing a statement of the U.S. Department of Justice.
Detention was carried out by the Estonian Central Criminal Police together with the FBI.
It is noted that the suit with 18 charges against Potapenko and Turygin was submitted to a jury in the Western District of Washington on October 27.
The document states that Potapenko and Turygin (both 37 years old) induced the victims to enter into fraudulent contracts to lease equipment with the cryptocurrency mining service HashFlare and invest in Polybius Bank, a virtual currency bank that was fictitious and did not pay the promised dividends.
The victims paid Potapenko and Turygin’s companies more than $575 million, and then they both used shell companies to launder proceeds and purchase real estate and luxury cars, the U.S. Justice Department said.
“The size and scope of the alleged scheme is truly impressive,” said Assistant Attorney General Kenneth Polite Jr. of the Justice Department’s criminal division.
“Victims in the U.S. and abroad invested in what they thought was a sophisticated virtual asset, but turned out to be part of a fraudulent scheme that affected thousands of people,” said Luis Quesada, assistant director of the FBI’s Criminal Investigations Division.
It is noted that the cryptocriminals engaged in small scams, but encompassed multiple victims in different countries.
“The criminals are taking advantage of economies of scale.
They stay below the radar of law enforcement in different countries because the amount stolen from each individual user is small,” said Carmel King, director of the Grant Thornton collection company.
“U.S. and Estonian authorities are working to seize these assets as well as seize the proceeds of these crimes,” the statement said.
According to the department, Potapenko and Turygin purchased at least 75 properties, six luxury cars, cryptocurrency wallets and thousands of cryptocurrency mining machines in the money-laundering scheme.
The U.S. Justice Department thanked Estonian law enforcement authorities for their cooperation in apprehending Potapenko and Turygin and will apply for their arrest during the investigation and extradition to the United States.
If Potapenko and Turygin are found guilty, they could face up to 20 years in jail.
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