A Swedish man has been sentenced to 15 years in prison for allegedly stealing more than $16 million in cryptocurrency funds. 47-year-old Roger Nils-Jonas Karlsson stole the money from more than 3,700 people after convincing them to invest in a phony company called Eastern Metals Securities.
Karlsson Pleads Guilty to Crypto Fraud
Individuals were coaxed into sending bitcoin and other cryptocurrency funds to the company on the basis that they would see heavy returns. Instead, Karlsson used the money to purchase lavish gifts for himself and boost his lifestyle. He pleaded guilty to charges of money laundering, securities fraud, and wire fraud in early March of this year and has now been given his sentence.
This is a classic example of the financial fraud that largely occurs in the digital currency space. One convinces someone to send them money under the guise of a legitimate enterprise only to use the forwarded funds on personal expenditures.
In addition, the scheme in question was wrought with red flags. For example, Karlsson enticed his investors with single shares in the company, priced at approximately $100. For every share purchased, Karlsson said that he would send the buyer approximately 1.15 kilograms in gold, which would have been worth approximately $45,000 at the time the scheme was in operation. Pay $100 and receive $45K? Sounds fishy already.
He also provided his clients with falsified financial statements to give them the idea that their money was safe and being put to good use. He also claimed to be working with the Securities and Exchange Commission (SEC) to resolve potential delays regarding certain payouts.
Acting U.S. attorney Stephanie Hinds spoke of the recent case in a statement and claimed:
The investigation into Roger Karlsson’s fraud uncovered a frighteningly callous scheme that lasted more than a decade during which Karlsson targeted thousands of victims, including financially vulnerable seniors, to callously rob them of their assets and all to fuel an extravagant lifestyle surrounded by luxury condominiums and lavish international vacations. The court’s decision to order a 180-month prison term reflects the fact that Karlsson’s cryptocurrency Ponzi scheme is one of the largest to be sentenced to date and ensures that Karlsson now will have plenty of time to think about the harm he has caused to his victims.
This Has Been Going On for a While
The scam goes back nearly ten years as Karlsson was allegedly investigated in 2012 for similar crimes. Overall, he purchased several luxury items for himself with his clients’ money including a racehorse, multiple homes, and a resort in Thailand. It was here where he was arrested in 2019 and later extradited to the United States.
As part of his sentencing, Karlsson will be forced to forfeit several of his homes, along with the resort. He has also been ordered to pay more than $16.2 million back to the people he victimized.