Satish Kumbhani, the founder of BitConnect, thought to be the biggest crypto-related Ponzi scheme of all time, is nowhere to be found.
Kumbhani, an Indian citizen, was indicted last week for misleading US investors about BitConnect’s purported “Lending Program.”
“As alleged in the indictment, however, BitConnect operated as a Ponzi scheme by paying earlier BitConnect investors with money from later investors. In total, Kumbhani and his co-conspirators obtained approximately $2.4 billion from investors,” the Department of Justice said in a statement.
“As cryptocurrency gains popularity and attracts investors worldwide, alleged fraudsters like Kumbhani are utilizing increasingly complex schemes to defraud investors, oftentimes stealing millions of dollars,” said Special Agent in Charge Ryan L. Korner of the IRS Criminal Investigation’s (IRS-CI) Los Angeles Field Office.
“However, make no mistake, our agency will continue our long tradition of following the money, whether physical or digital, to expose criminal schemes and hold the fraudsters accountable for their illegal acts of trickery and deceit.”
If convicted of all counts, Kumbhani faces a maximum of 70 years in prison, but authorities are going to have to find him first. Lawyers for Kumbhani said in a legal filing that the 34-year-old likely vanished from India, but his precise location is unknown.
“The Commission did not know the whereabouts of Kumbhani, an Indian citizen, at the time it filed this action, and BitConnect is an unincorporated entity the Commission must serve through its manager, Kumbhani, pursuant to Rule 4(h)(1)(B) and Rule
4(h)(2).In October 2021, the Commission learned that Kumbhani has likely relocated from India to an unknown address in a different foreign country. Since November, the Commission has been consulting with that country’s financial regulatory authorities in an attempt to locate Kumbhani’s address. At present, however, Kumbhani’s location remains unknown, and the Commission remains unable to state when its efforts to locate him will be successful, if at all.”
BitConnect was one of the biggest initial coin offerings (ICO) of 2017, with its BCC token skyrocketing to nearly $500 before collapsing to under $1 in weeks when Kumbhani pulled the plug on the scheme.
American citizen Glen Arcaro also pleaded guilty for his involvement in the scheme in September of last year, admitting that he earned no less than $24 million from the BItConnect saga.
