A crook who started a company called My Big Coin to swindle victims out of more than $6 million has been found guilty by a jury.
Randall Crater, 51, of East Hampton, New York, was sentenced this week [PDF] four counts of wire fraud and three counts of money laundering.
He is scheduled to be sentenced by a US federal judge on October 27. Each of the wire fraud charges carries a maximum sentence of up to 20 years in prison, while each money laundering charge carries up to a decade behind bars.
Crater founded the now-defunct company in Las Vegas in 2013 and lured brands into buying a fake virtual currency he dubbed My Big Coin. Purchased My Big Coins were apparently stored in online accounts provided by the scammer’s facility and Marks was told the tokens could be exchanged for other currencies and used to purchase goods and services.
Between 2014 and 2017, Crater and his associates urged victims not to worry because the fake cryptocurrency was backed by $300 million in gold, oil and “other assets,” according to court documents [PDF].
Crater also claimed that the company has a partnership with MasterCard that allows it to offer the My Big Coin MasterCard. This was described as a credit card that could use funds from a customer’s coin account. Prosecutors say Crater and his crew marketed all of these falsehoods through social media, the web, email and text messages.
In reality, however, there was no gold or other assets, nor a MasterCard partnership. And the coins couldn’t just be transferred or used for anything: the victims just handed over their money.
Over the course of his plan, Crater reaped more than $6 million from people, according to prosecutors, and spent hundreds of thousands of dollars on antiques, artwork, and jewelry. We were told that this included a $87,008 “rare stone” that Crater bought along with other items at New York auction house Lord and Guy.
In January 2018, the US government’s Commodity Futures Trading Commission announced commodity fraud charges against Crater and My Big Coin, and also filed civil charges against My Big Coin’s CEO, John Roche, and two Crater associates, Mark Gillespie and Michael Kruger.
Crater was arrested and charged with criminal charges a year later in Florida for his involvement in the fraud and was convicted at his trial Thursday this week.
In another crypto fraud case this week, a now-former Coinbase exec, his brother, and a friend have been charged with wire fraud conspiracy and wire fraud. Prosecutors called it the first-ever cryptocurrency insider trading scheme in the US.
Ishan Wahi, a 32-year-old former product manager at Coinbase Global who lives in Seattle, Washington, and his 26-year-old brother Nikhil Wahi, also from Seattle, were arrested Thursday morning.
A third co-conspirator, 33-year-old Sameer Ramani of Houston, Texas, remains at large.
The US Department of Justice and the FBI claim the three men made a $1.5 million insider trade by exploiting confidential Coinbase information about which crypto assets to list on the Coinbase exchange. ®