A Swedish citizen who promised investors huge returns in a gold and cryptocurrency investment scheme has pleaded guilty to securities fraud.
On Thursday, the US Department of Justice (DoJ) said Roger Nils-Jonas Karlsson pleaded guilty to securities fraud, wire fraud, and money laundering in a case that the agency says defrauded investors out of over $16 million.
The 47-year-old was the operator of Eastern Metal Securities (EMS), a now-defunct company that used a website to lure investors into participating in a scheme that promised incredible returns for their cryptocurrency.
According to the US agency, Karlsson offered investors a share of a “plan” that would eventually pay out in gold, a high-value commodity, from 2012 to 2019.
For only $100 per share, each investor was promised an eventual return of 1.15kgs in gold, worth over $45,000 as of January 2019. Each share was purchased through cryptocurrency including Bitcoin (BTC).
Investors were also assured that in the event this return didn’t happen, they would receive 97% of their funds back.
A second website was used to “delay” the moment investors in the “Pre Funded Reversed Pension Plan” (PFRPP) would realize they had been scammed, prosecutors claim, and Karlsson allegedly kept false and frequent dialogues going to this end.
“For example, on one occasion, Karlsson explained that a payout had not occurred because releasing so much money all at once could cause a negative effect on financial systems throughout the world,” the DoJ says. “Karlsson also falsely represented that EMS was working with the US Securities and Exchange Commission (SEC) to prepare the way for a payout.”
Investor cash was sent to Karlsson’s personal bank accounts, the DoJ says, where it was later used to purchase homes and a resort in Thailand. At least 3,575 investors parted with over $16 million.
The criminal complaint was issued against Karlsson and EMS on March 4, 2019.
Karlsson, who went by at least six aliases, was arrested in Thailand on June 17, 2019, and extradited to the United States. Karlsson has pleaded guilty to all charges and the EMS website has been seized.
Karlsson faces a maximum sentence of 20 years in prison for the wire fraud and securities fraud charges, as well as a further 20 years behind bars for the money laundering charge. A maximum collective fine for the charges could reach $750,000. Forfeiture proceedings are ongoing.
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Source : ZDNet