New York based 27-year-old man charged in fraud allegations for a cryptocurrency scheme. The man, allegedly used $4.5 million collected from his victims for gambling but presented them an investment scheme.
Alleged Multi-Million Dollar Cryptocurrency Fraud
A 27-year-old, Douglas Jae Woo Kim has been charged in a criminal complaint at the U.S. Attorney’s Office. The complaint is for wire fraud and connects Kim to a multi-million dollar scheme to raise money for a cryptocurrency investment which was bogus. Instead, allegedly Kim was using the money to bet on online casinos located outside of the US. According to the allegation, Kim received more than $4.5 million in Bitcoin (BTC) and Ether (ETH) which he used to gamble.
His victims were not aware of that activity but were rather thinking that they are placing an investment and were expecting a profit. However, as it turns out, following an investigation by the Federal Bureau of Investigation (FBI), Kim was charged with one count of wire fraud, in violation of 18 U.S.C. § 1343.
How Did It All Begin?
According to the allegations, Kim’s activity began in October 2017. Kim allegedly contacted an investor by saying that he was investing in a cryptocurrency operation which provides profit fees. He described the project as “fairly modest operation.” Furthermore, Kim said that he already invested $300,000 – $400,000 and assured the investor that there was no risk. Once he received the cryptocurrency, Kim transferred half of the amount to a casino operator outside of the US which accepts Bitcoin currency.
A second encounter, described by the affidavit dates back to January 1, 2018, when Kim allegedly contacted his second victim. Once he received approximately $200,000 in Ether (ETH) he converted half of the funds to Bitcoin. In the next few days, Kim transferred the full amount to his personal account at a casino outside US borders. In total, Kim convinced his victims to transfer him an excessive of $4.5 million in various currencies.
Here it is important to mention that Kim currently only meets allegations that a crime has been committed. As per the US principals of Judicial System, Kim, as any other defendant is presumed innocent until proven guilty beyond a reasonable doubt. With that in mind, in the event that he is convicted, Kim may be facing a penalty of up to 20 years in prison as well as a fine of $250,000.