YEREVAN (CoinChapter.com) — On May 1, federal authorities made significant progress in a major crypto fraud case.

Notably, Damian Williams, the U.S. Attorney for the Southern District of New York, and James Smith from the FBI’s New York office arrested Idin Dalpour, a New York resident accused of masterminding a $43 million crypto Ponzi fraud, intertwining a Las Vegas hospitality business and a cryptocurrency trading operation.

Dalpour reportedly promised investors hefty returns, touting investments in hospitality and digital currencies. He claimed his company could buy cryptocurrency wholesale and sell it at substantial profits. Investors were drawn to promises of 42% annual returns and reassurances of investment safety through alleged insurance and escrow safeguards.

The Crypto Fraud’s Unraveling

The reality, however, was starkly different. Dalpour is accused of creating a deceptive front, using fabricated contracts and bank statements to lure investors. He bolstered his claims with fictitious email communications, painting a robust image of profitability and security.

The scheme began to collapse when a group of investors confronted Dalpour in November 2023. Facing the gravity of his actions, Dalpour admitted to the deceit, telling his investors, “What you already have, you have, you can put me in jail now. Like right now.” This confrontation marked a pivotal moment, leading to his arrest and the exposure of the fraud.

Financial and Personal Consequences

The crypto fraud investigation revealed that Dalpour did not invest the funds as promised. Instead, he diverted these to pay off earlier investors and cover personal expenses, including significant gambling debts and private school fees for his children.

James Smith commented on the arrest, emphasizing the FBI’s commitment to uphold economic justice. He stated, “Today’s arrest illustrates the FBI’s dedication to maintaining economic justice and ensuring the actions of one individual are not at the expense of others.” This case is part of a broader effort by U.S. authorities to clamp down on financial fraud, especially those schemes leveraging the burgeoning field of cryptocurrency.

In recent months, the SEC and FBI have cracked down on similar fraudulent activities. For example, in March, a $300 million Ponzi scheme targeting the Latino community was disrupted. Shortly afterward, two promoters of the defunct IcomTech were convicted, highlighting ongoing efforts to protect investors and maintain market integrity.

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Filed under: Bitcoin - @ May 2, 2024 3:16 pm