A man hailing from California has admitted to being the conspirator involved in offering and selling unregistered securities and also subscribing to a false tax return in connection with his role in the BItClub Network, a cryptocurrency mining club worth at least $722 million. Joseph Frank Abel of Camarillo, California has pleaded guilty by a video conference before the U.S. district judge.
Along with Abel, the other co defendants – Matthew Brent Goettsche, Russ Albert Medlin, Jobadiah Sinclair Weeks, and Joseph Frank Abel – were charged by indictment in December 2019. The case documents and the statements made in court related to the case said:
From April 2014 through December 2019, the Bitclub Network has been a fraudulent scheme that was involved in soliciting funds from investors in lieu of shares of the impersonated mining pools. It rewarded investors for pooling new investors in the scheme. Abel was involved as a large-scale operator and promoter of the BitClub Network. He played a key role in selling shares of the network despite having the knowledge that the network and its operators had not filed a registration statement to register share with the SEC which is the mandatory step.
Abel has admitted that he had taken money from investors in exchange for shares of the Network’s mining pools. He also created and posted different videos to the internet, and gave speeches about networks in the U.S. and other countries including Asia, Africa, and Europe. As a part of the conspiracy, he also instructed investors in the U.S. to use a Virtual private network (VPN) so that their IP addresses would not be detected by the US law enforcement. He also admitted failing to report on a Form 1040 US income tax return for the tax year 2017 approximately $1 million in cryptocurrency.
The conspiracy charge against Abel for which he pleaded guilty carries a maximum penalty of 5 years in prison and $250,000 or twice the pecuniary gain to the defendant or loss to the victims involved in the scam. The tax charge carries a maximum penalty of three years in prison and a fine of $100,000. The sentencing is scheduled for Jan. 27, 2021.
The host of special agents involved in the case were from IRS Newark, LA along with task force officers of the FBI Los Angeles division, West Covina Resident agency, the FBI criminal investigative division, the financial crime section, and members of the Ventura Police Department. The teams from these respective divisions of law enforcement agencies have led the investigation leading to the guilty plea. The Government is represented by unit chief David W. Feder with Assistant U.S attorneys of the cybercrime unit, attorneys of the Asset recovery, and Money laundering unit of the US attorney’s office in Newark.
The other defendants in the case presently are merely accusations. But proceedings of investigations will be done. They will be announced innocent unless they are proved guilty in the ongoing investigation.