Fun

Localbitcoins Trader Facing up to 40 Years in Prison Over Bitcoin Fraud Schemes

News Feed - 2020-12-25 12:12:44

Localbitcoins Trader Facing up to 40 Years in Prison Over Bitcoin Fraud Schemes


A trader on Localbitcoins and Paxful has pleaded guilty to charges in connection with a couple of bitcoin scams. The U.S. Department of Justice alleges that the trader knowingly sold bitcoin to victims of fraudulent schemes. Bitcoin Trader Facing Jail Time


The U.S. Department of Justice (DOJ) announced last week that a Boston man has pleaded guilty in federal court to his role in two bitcoin fraud schemes. Austin Nedved “pleaded guilty to aiding and abetting wire fraud and money laundering conspiracy,” the DOJ detailed, adding that the 29-year-old is currently “in custody serving a sentence for a separate fraud conviction.” The announcement states: Nedved admitted that he ran a business in which he bought and sold digital currencies, including bitcoin, for cash. Nedved advertised his services under the screen name ‘usmc1991’ over Localbitcoins.com and Paxful.com.


The Justice Department described that he “aided and abetted romance and lottery schemes targeting vulnerable victims.” In romance schemes, victims believe they are in love with the scammers and send money abroard in the form of bitcoin. In lottery schemes, victims believe that “they can obtain lottery winnings or sizeable government grants by forwarding cash for administrative fees or expenses to the fraudsters,” the DOJ described.


In late 2017, a scammer posed as an American owner of an oil company and succeeded in making a 78-year-old fall in love with him. Without ever meeting in person, she agreed to marry him. The scammer then told her that his oil company “had experienced an accident abroad in which people had died, and that he needed money to settle obligations arising from the accident with a foreign government.” He convinced her that unless she sent him some bitcoins to pay the settlement, he would not be able to return to the U.S. and marry her.


The victim, who never purchased bitcoin before, contacted Nedved in June 2018. They met in a parking lot in Maine and she purchased about $100,000 worth of BTC with cash. Nedved then transferred the coins to a wallet controlled by the scammer.


The DOJ alleged that when Nedved accepted $100,000 from the 78-year-old, he knew that she was a romance scam victim. Nonetheless, he and his co-conspirator took another $40,000 from her. According to the DOJ: Despite knowing or being willfully blind to the fact that his customers were fraud victims, Nedved sold bitcoin to them so that they could send money overseas to the fraudsters.



In total, Nedved and his co-conspirators sold more than $630,000 worth of BTC to bitcoin scam victims, the DOJ claimed, alleging that they knew “that the cash constituted proceeds of romance and lottery scams and other unlawful activities.”


The Department of Justice explained that “The charges of aiding and abetting wire fraud provide for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss, whichever is greater.” In addition, “The charge of money laundering conspiracy provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $500,000 or twice the value of the funds involved in the financial transactions that were the object of conspiracy.”


What do you think about the charges against this bitcoin trader? Let us know in the comments section below. The US SEC Fines Shipchain $2 Million for Conducting an Unregistered Token Offering: Company Agrees to Cease Operations REGULATION | 5 hours ago Electronic Frontier Foundation: US Government Will Expand Financial Surveillance Through FinCEN"s Proposed Crypto Wallet Rules REGULATION | 14 hours ago Tags in this story Bitcoin Fraud, Bitcoin Scam, Bitcoin Scams, bitcoin schemes, LocalBitcoins, localbitcoins seller, localbitcoins trader, Paxful, paxful trader, paxful traders, prison sentences


Image Credits: Shutterstock, Pixabay, Wiki Commons Purchase Bitcoin without visiting a cryptocurrency exchange. Buy BTC and BCH here. Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments

News Feed

Ezra Reguerra19 hours agoBTS: Revisiting the ‘buy $1 worth of Bitcoin’ video 10 years laterDavinci Jeremie believes that while many people missed out on the opportunity to buy Bitcoin 10 years ago, it’s not too lat
CME Says It Will Launch Bitcoin Options in January
Derivatives exchange CME Group has announced it will launch options on its bitcoin futures contracts in January. In a notice on its website on Tuesday, the Chicago-based exchange sa
Georgia to Pilot Digital Currency in Retail Commerce Next Year
Georgia to Pilot Digital Currency in Retail Commerce Next Year The central bank of Georgia is advancing its digital currency project. The monetary authority is preparing to launch
Gareth Jenkinson9 hours agoBlockchain IoT firm Nodle goes open source with Web3 Bluetooth ‘nanocomputer’ stickerNodle unveils open-source Bluetooth ‘nanocomputer’ N1 sticker aimed at increasing IoT connectivity a
Brazilian Development Bank Launches Blockchain Network
Brazilian Development Bank Launches Blockchain Network The Brazilian Development Bank has officially launched the Brazilian Blockchain Network, a structure designed to aid other in
Bitcoin, Ethereum Technical Analysis: BTC Below $16,000 Amid Increased Market Volatility
Bitcoin, Ethereum Technical Analysis: BTC Below $16,000 Amid Increased Market Volatility Bitcoin slipped below $16,000 on Nov. 21, as markets continued to react to the news that th
A Mysterious Airdrop Called EIDOS Is Clogging EOS to Make a Point
EOS has been clogged up by a giant airdrop for a token called EIDOS – and it’s not clear the token is even good for anything. In fact, it seems as though the people behind t
Singapore Government’s Temasek Writes Down $275M Investment in Collapsed Crypto Exchange FTX
Singapore Government"s Temasek Writes Down $275M Investment in Collapsed Crypto Exchange FTX Singapore government’s Temasek has written down the full value of its $275 millio
Tom Mitchelhill7 hours agoBinance and CEO Changpeng Zhao ask court to dismiss SEC suitBinance Holdings, its U.S. counterpart, and CEO Changpeng Zhao have filed motions seeking the dismissal of a lawsuit against them by t
SEC’s closed-door policy stifling crypto innovation — Hester Peirce
Martin Young3 hours agoSEC’s closed-door policy stifling crypto innovation — Hester Peirce“Crypto Mom” called for more positive engagement with crypto firms and fewer enforcement threats from the SEC.1702 Total v
Hong Kong Regulator Warns About Unregulated Cryptocurrency Trading Platforms and Binance
Hong Kong Regulator Warns About Unregulated Cryptocurrency Trading Platforms and Binance Hong Kong’s Securities and Futures Commission (SFC) has issued a w
Prashant Jha11 hours agoBinance applies for Taiwan AML compliance: ReportThe world’s leading crypto exchange by trading volume has reportedly applied to register in Taiwan under the new AML compliance.1040 Total views4