ICYMI: BitConnect founder indicted for alleged $2.4 billion Ponzi scheme
The US Department of Justice announced on Friday that a San Diego federal grand jury had charged Kumbhani with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting business and conspiracy to commit international money laundering.
Through BitConnect's"Lending program," Kumbhani and his co-conspirators allegedly defrauded investors out of $2.4 billion. According to the DOJ, BitConnect executives and promoters claimed the firm's trading technology was a means to generate significant profits and guarantee returns for investors, but instead used the investments to pay earlier investors in a Ponzi scheme format.
The indictment further alleges that Kumbhani directed a network of BitConnect promoters to pump the price of the firm's BitConnect Coin, and also evaded US financial regulations to avoid scrutiny. He faces a maximum of 70 years in prison if convicted of all charges. Kumbhani is an Indian citizen, and remains at large, according to the DOJ.
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