Two Nigerians are in trouble in the United States after being indicted by prosecutors for running a fraudulent bitcoin investment scheme.
The Nigerians, Onwuemerie Ogor Gift and Kelvin Usifoh, were charged by Oregon District Attorney’s Office with 11 counts of wire fraud, as well as conspiracy to commit wire fraud and money laundering, according to a report.
Just Thursday, it emerged that nine Nigerians had been arrested in the United States for allegedly defrauding individuals and businesses of more than $3.5 million.
Geoffrey S. Berman, the United States attorney for the southern district of New York, and James C. Spero, special agent in charge of the Tampa, Florida, field office of U.S. immigration and customs enforcement’s Homeland security investigations (“HSI”), disclosed this in a statement on Thursday.
From December 2017 to June 2018, Gift and Usifoh allegedly promoted the fake bitcoin investment scheme via three websites wealthcurrency.com, boomcurrency.com and merrycurrency.com – promising investors 20–50 percent risk-free returns with instant withdrawals.
Gift and Usifoh falsely claimed that victims’ bitcoins would be invested using “unique trading methods” and that they would maintain a “constant high interest rate.” The pair also allegedly encouraged investors to transfer bitcoin to their own cryptocurrency wallets. Once transferred, Gift and Usifoh would exchange it for Nigerian naira.
In over six months, the defendants stole 10.88 bitcoins (worth approximately $56,391 at press time) from three victims, one residing in Oregon and two in California, according to the indictment. They also used a photo of a fourth victim to promote their scheme.
In total, the prosecutors alleged that Gift and Usifoh received more than 50 bitcoins ($259,000) through the scam.
Largely due to their pseudonymous, online nature, cryptocurrencies are becoming increasingly popular as a means to scam investors. But law enforcement is catching up.
Last month, New York prosecutors charged a man in a nine-count indictment for duping investors out of over $200,000 in cryptocurrency and cash. And, in February, a 20-year-old man was indicted in the New York Supreme Court over SIM-swapping identity and crypto theft.
Warning cryptocurrency investors over such schemes, the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission jointly issued an alert earlier this week, saying that claims such as “risk-free”, “absolutely safe” and “guaranteed profit” are hallmarks of a fraud.
The suspects in the $3.5 million scam are Oluwaseun Adelekan, Olalekan Daramola, Solomon Aburekhanlen, Gbenga Oyeneyin, Abiola Olajumoke, Temitope Omotayo, Bryan Eadie, Albert Lucas and Ademola Adebogun.
The US officials said the suspects allegedly committed the fraud through business email compromises, a Russian oil scam, and a romance scam.
“As alleged, these defendants deployed three different email schemes to defraud their victims. The common denominator in all three schemes was the defendants’ alleged fleecing of their victims through fictitious online identities,” said Berman.
“The schemes allegedly earned the defendants $3.5 million – and also arrests on federal felony charges.”
The defendants are accused of participating in a scheme to defraud businesses and individuals through several categories of false and misleading representations.
“Sending victims email messages that appeared to be, but were not, from legitimate business counterparties that included instructions to the victims to wire payment to those seemingly legitimate business counterparties into bank accounts that were actually under the control of, and/or maintained by, Adelekan, Daramola, Aburekhanlen, Oyeneyin, Olajumoke, Omotayo, Eadie, Lucas, and Adebogun (the “Business Email Compromise Scam”),” read the statement.
“Sending email messages and text messages to at least one victim offering an opportunity to invest in oil stored in Russian oil tank farms conditioned on that victim wiring upfront payments into bank accounts purportedly affiliated with the purported oil investment but actually opened by and under the control of Aburekhanlen, Olajumoke, and Oyeneyin (the “Russian Oil Scam”).
“Sending email messages and text messages to at least one victim from an individual (or individuals) purporting to be a female with romantic intentions toward the victim requesting, further to establishing a romantic relationship, the wiring of payment into a bank account under the control of Omotayo (the “Romance Scam”).”
They are each charged in the indictment with one count of conspiring to commit wire fraud and each defendant faces a maximum potential sentence of 20 years in prison