US Government Seeking Extradition Of Swedish Man Who Masterminded $11 Million Bitcoin Scam
None of the world’s financial markets is free of fraud and none probably will be. Throughout history there has always been evidence of all kinds of schemes and plots to exploit people's vulnerability and swindle them of their hard-earned cash. This is one of the many points some people have against cryptocurrency because it's decentralized, irreversible and largely untraceable nature makes it easy for criminals to either get away with financial crime or at least move stolen money around. Cryptocurrency is already the preferred way to make and receive payments on the dark web, increasing the difficult law enforcement agencies already have with tracking and stifling illegal activity taking place there.
To pile up on cryptocurrency exploitation, a Swedish man was recently arrested and charged along with his company for various financial misdeeds including wire fraud, securities fraud and money laundering. The man, Roger Nils-Jonas Karlsson along with his company Eastern Metal Securities (EMS), were charged for initiating and running a fraudulent scheme that sought to swindle people of money to the tune of $11 million and has been doing this since September 2006.
According to a publication by the United States Department of Justice, “Karlsson allegedly used websites to communicate false representations to victims in a scheme to defraud potential investors.” The official complaint disclosed that he asked his “investors” to make their payments using Bitcoin.
One of his websites which was registered to a non-existent person advertised a plan called the “Pre Funded Reversed Pension Plan” and with this plan, potential investors were asked to “purchase shares of the plan for $98 per share in exchange for an eventual payout of 1.15 kilograms of gold per share, even though as of Jan. 2, 2019, 1.15 kilograms of gold was worth more than $45,000.”
As part of the scheme, potential investors were also told that if something goes wrong with the regular plan to pay gold, they would all get at least 97 percent of whatever amounts they put in. Up until the point he was arrested, there were no accounts anywhere held by Karlsson or his company that would enable him to make the payments as promised as it was discovered that Karlsson diverted the money to his own personal bank accounts and used it to fund real estate dealings in Thailand.
On a different website, the alleged fraudster deliberately pushed some misinformation to his investors. Merging investors from the old site to the new one, Karlsson released more than a few messages that gave some information about why payments were being delayed. One of such messages alleged that the reason for delays in pay-out was an interest in the stability of the global financial market. He claimed that making a pay-out that large would have a very serious and unwanted impact on the world’s financial market. His solution to this was an ongoing parley with the U.S. Securities and Exchange Commission to figure out a solution.
At the moment, the United States wants Karlsson extradited so he can be tried in the Northern District of California.