Promising profits from cryptocurrency mining, American Chester Stojanovich managed to raise more than $2 million from dozens of investors. However, the scammer used the money for his own gain, that is, there was no mining activity.
Stojanovich was arrested between the US and Canadian borders last April. Later, in November 2022, he pleaded guilty to the financial fraud charges.
The U.S. Justice Department announced a three-year sentence for Stojanovich on Thursday. In addition, the American will also have to compensate his victims.
“Chet Stojanovich took advantage of a glitzy new trend in the financial industry by tricking his victims into sending him more than $2 million in exchange for cryptocurrency-related technology and equipment that these victims never received”lawyer Damian William commented on the case.
Finally, the DoJ points out that Stojanovich initiated the plan in March 2019 and the coup only came to an end with his arrest in April 2022. The main front company used by the criminal was called Chet Mining, but the criminal also had other businesses. .
Understanding cloud mining scams
As cryptocurrencies have become a hot topic in the media in recent years, many people think they can jump at the chance to invest in the sector. One would be cryptocurrency mining.
However, without knowledge of the area, such investors seek (or become) third parties to manage their money.
Therefore, scammers are taking the opportunity to offer quick profit plans. The problem is that, as in the case above, investors are paid with money coming in from other investors, in other words, a Ponzi scheme.
As highlighted by the US Department of Justice, Stojanovich was arrested because he failed to prove he had purchased the equipment he claimed to have purchased. After this, it also failed to prove that it had mined cryptocurrency.
“[Stojanovich] spent the money on unrelated and personal expenses, including chartered air flights, hotel rooms, limousines, and private parties.
So this is another warning to doubt promises of cloud cryptocurrency mining revenue. Good advice is to visit the place where the equipment is installed to make sure they are there.
Otherwise, there is a high chance of getting into a scam. As a result, a scammer will not only lose your money but also flaunt a luxurious life on social media, which will attract even more victims to his scam.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
