A federal jury has convicted Randall Crater, the founder of My Big Coin, of wire fraud and money laundering for selling fraudulent virtual currency the U.S. Justice Department announced on Thursday.
According to court documents and evidence presented at trial, Randall Crater, 51, of East Hampton, founded My Big Coin Pay Inc. (My Big Coin), a purported cryptocurrency and virtual payment services company headquartered in Las Vegas, Nevada, and offered virtual payment services through a fraudulent digital currency, “My Big Coins,” which he marketed to investors between 2014 and 2017 using misrepresentations about the nature and value of Coins. Crater and his associates falsely claimed that Coins was a fully functioning cryptocurrency backed by $300 million in gold, oil and other valuable assets. Crater also falsely told investors that My Big Coin had a partnership with MasterCard and that Coins could readily be exchanged for government-backed paper currency or other virtual currencies. Crater promulgated these misrepresentations through social media, the internet, email and text messages.
In reality, Coins were not backed by gold or other valuable assets, did not have a partnership with MasterCard and were not readily transferable, the DOJ said.
According to the DOJ, over the course of the scheme, Crater misappropriated over $6 million of investor funds for his own personal gain, including spending hundreds of thousands of dollars on antiques, artwork and jewelry.
In January 2018, the Commodity Futures Trading Commission (CFTC) announced commodity fraud charges against Crater and My Big Coin Pay Inc. The CFTC also filed civil charges against the Chief Executive Officer of My Big Coin, John Roche, and two of Crater’s associates Mark Gillespie and Michael Kruger.
Crater was convicted of four counts of wire fraud, which carries a maximum statutory penalty of up to 20 years in prison for each count, and three counts of money laundering, which carries a maximum statutory penalty of up to 10 years in prison for each count, the DOj said.
He is scheduled to be sentenced on Oct. 27. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
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