Sheepshead Bay

Cryptocurrency con lands Sheepshead Bay programmer in prison

November 19, 2019 Meaghan McGoldrick
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A Sheepshead Bay computer programmer and cryptocurrency promoter was sentenced Monday to 18 months in prison for conspiring to commit fraud.

According to officials, 39-year-old Maksim Zaslavskiy and others fraudulently marketed a pair of ICOs, or initial coin offerings, to the public during what Crain’s New York called “Bitcoin mania” in 2017.

ICOs, a type of digital currency, were a “hot market” then, according to Crain’s. Investors poured more than $20 billion into thousands of crypto-deals — among them, “REcoin” and “Diamond,” sham ICOs headed by Zaslavskiy.

The two currencies were based on real estate and diamonds, respectively. Zaslavskiy traded in neither, officials said, and the certificates he sent investors were worthless.

“Zaslavskiy committed an old-fashioned fraud camouflaged as cutting-edge technology,” United States Attorney for the Eastern District of New York Richard Donoghue said in a statement. “This office will continue to investigate and prosecute those who defraud investors, whether involving traditional securities or virtual currency.”

According to Crain’s, the tech-savvy Brooklyn conspirator “issued a slew of false and misleading statements” about the ICOs, which eventually got him about 1,000 investors and $300,000.

His acts eventually made him the first person to be charged criminally with ICO fraud, to which he pleaded guilty last year.

Restitution will be determined by the court at a later date, officials said Monday.

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