German accused of cryptocurrency fraud of $150 million evades capture

A German citizen, involved in an alleged cryptocurrency fraud scheme valued at $150 million, has become a fugitive after failing to appear before a federal court in Brooklyn.

The suspect, who was under house arrest in New York, had secured a bail of $5 million guaranteed by his partner and children.

Scheduled trial for March 31

According to a specialized media outlet, the defendant did not attend a preliminary hearing, which led the Brooklyn District Attorney's office to begin its search. A spokesperson for the office stated: "There is a very active investigation underway to capture him."

In addition to seeking the confiscation of the bail, prosecutors aim to recover the $4 million that were "personally guaranteed" by the couple and relatives of the accused, all residents of Germany.

It is suspected that on October 3, the accused tampered with his ankle monitor, raising concerns about his compliance with the conditions of release imposed by the court. The probation services ordered him to visit their office the day after the device malfunctioned, but he did not show up.

Facing multiple charges of securities fraud and conspiracy related to a multi-level marketing scheme known as USI Tech, his trial is scheduled for March 31.

Cryptocurrencies linked to the alleged fraud

Prosecutors also allege that he deceived retail investors by promising average returns of 140% in 140 days, claiming that they could profit through investments in supposed Bitcoin mining and trading operations (BTC), as well as recruiting others to purchase USI Tech products.

However, researchers claim that the platform was a "front," and that the accused ultimately diverted millions in funds from investors.

A deputy director of the FBI stated in January that the suspect "stole millions of his investors' money and fled the country" when the scheme began to unravel. His whereabouts are currently unknown, although court records indicate that he previously lived in Brazil and Spain before his arrest in Florida in late 2023.

The defendant was released on bail in January under strict conditions, which included staying in New York or Long Island and surrendering all travel documents. His partner acted as his custodian, responsible for reporting any violations of the conditions of his release.

The USI Tech scheme, launched in Europe and marketed in the United States since 2017, has been described as a "multilevel marketing operation" that relied on recruiting new investors to maintain the returns of previous ones.

After facing regulatory scrutiny, USI Tech ceased its operations in the U.S. in early 2018, leaving investors without access to their funds and resulting in substantial financial losses.

According to the report, a large part of the money missing from the cryptocurrency scheme, estimated at $150 million at the time of the arrest, was supposedly held in cryptocurrency assets such as Ethereum ( ETH ) and Bitcoin, which were transferred to digital wallets controlled by the accused after the company ceased operations.

At the time of writing this article, BTC, the largest coin in the market, is trading at $62,730.

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