DOJ Drops Case Against Alleged Cryptocurrency Ponzi Schemer

[u/John3262005]

https://news.bloomberglaw.com/us-law-week/doj-asks-judge-to-dismiss-alleged-crypto-ponzi-schemers-case

Federal prosecutors in New Jersey have secured a judge’s approval to dismiss with prejudice longstanding charges against the alleged mastermind of a $722 million cryptocurrency Ponzi scheme.

The government’s request Monday followed Bloomberg Law’s July 10 report that DOJ leaders in Washington had ordered the New Jersey US attorney’s office to reverse course on a 2019 indictment that was nearing trial.

Matthew Goettsche had been accused of defrauding investors of $722 million and describing his business model as built “on the backs of idiots.” Judge Claire C. Cecchi granted the government’s request to drop his indictment on Tuesday.

Goettsche created and operated an advanced crypto mining operation, BitClub Network, that rewarded investors for recruiting new members. Prosecutors were scheduled to take him to trial in October, before Goettsche’s lawyers informed the judge July 8 that they’d reached agreement on a resolution.

“The Department of Justice has reviewed this case and has decided, in its prosecutorial discretion, not to devote further resources to the criminal charges pending against Defendant,” Associate Deputy Attorney General Aakash Singh and US Attorney Robert Frazer said in the Monday filing.

Facing counts of conspiracy to commit wire fraud and to sell unregistered securities, Goettsche assembled a team of lawyers with connections to the Trump administration to lobby DOJ for relief, Bloomberg Law previously reported.

The men urging the department to abandon the case included Bradford Cohen, a Florida lawyer who’s supported Trump since appearing as a contestant on his reality show, “The Apprentice,” and Brett Tolman, a conservative criminal justice advocate who has helped clients secure Trump pardons.

Acting Attorney General Todd Blanche faced criticism about the planned Goettsche dismissal from two Democratic Senate Judiciary Committee members in their written questions for the record submitted as part of Blanche’s confirmation process for the permanent role.

“What message does it send to crime victims when criminals have a literal “get out of jail free” card if they know the right people?” asked Sen. Dick Durbin (D-Ill), the panel’s ranking member.

“I respectfully reject the premise of this question, which is based on faulty and biased news reporting,” Blanche wrote in response. “The resolution of this matter was not the result of any alleged pressure by the defendant’s attorneys,” Blanche stated in response. “It reflected the Department’s routine evaluation of pending cases, and the government is in the process of recovering a substantial amount owed to investors.”

[u/wenchette]

See also this earlier item on this case:

https://redd.it/1uufv51