Camarillo man and two others arrested in alleged $722-million cryptocurrency fraud scheme

Three men, including one from Camarillo, have been arrested in connection with an alleged cryptocurrency mining scheme that authorities say defrauded investors out of hundreds of millions of dollars from April 2014 through December 2019. The Department of Justice announced charges Tuesday.

Matthew Brent Goettsche, 37, of Lafayette, Colo.; Jobadiah Sinclair Weeks, 38, of Arvada, Colo.; and Joseph Frank Abel, 49, of Camarillo, were indicted on charges of conspiracy to offer and sell unregistered securities. Goettsche and Weeks were also charged with conspiracy to commit wire fraud.

U.S. Atty. Craig Carpenito described the alleged fraud as a “modern, high-tech Ponzi scheme” that amounted to $722 million. Two other suspects remain at large.

“Those arrested today are accused of deploying elaborate tactics to lure thousands of victims with promises of large returns on their investments in a bitcoin mining pool, an advanced method of profiting on cryptocurrency,” said Paul Delacourt, the assistant director in charge of the FBI’s Los Angeles Field Office. “The defendants allegedly made hundreds of millions of dollars by continuing to recruit new investors over several years while spending victims’ money lavishly.”

The defendants operated BitClub Network, providing false and misleading figures that investors were told were “bitcoin mining earnings” in exchange for money, Carpenito said.

According to court documents, officials said that Goettsche referred to investors as “dumb” and said he was “building this whole model on the backs of idiots.” On at least three occasions, the illegality of the alleged scheme was referenced to Goettsche. Additionally, he, Weeks, Abel, and others conspired to sell BitClub Network shares when they were unregistered securities, authorities said.

The maximum penalty for wire fraud conspiracy is 20 years in prison and a fine of up to $250,000. Conspiracy to sell unregistered securities carrie a maximum penalty of five years in prison and a fine up to $250,000.