The founder of a cryptocurrency and virtual payment services company who authorities say cheated dozens of investors out of about $7.5 million, which he used to buy a house, cars, jewelry, and other luxuries, has been sentenced to more than eight years in prison.
Randall Crater, 52, founded Las Vegas-based My Big Coin Pay Inc. in 2013, offering virtual payment services through a fraudulent digital currency, My Big Coin, from 2014 to 2017, the U.S. attorney’s office in Boston said in a statement on Tuesday.
Crater and associates he paid to promote the scheme through social media, email and text messages, said the coins were a fully functioning cryptocurrency backed by gold; that the company had a partnership with MasterCard; and that the currency could be exchanged for government-backed currency or other virtual currencies, none of which was true, prosecutors said.
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The Commodity Futures Trading Commission alleged that My Big Coin was a fraud in January 2018.
Crater’s 55 victims had to delay retirement, lost tuition money, and suffered other financial hardships, Joseph Bonavolonta, head of the FBI’s Boston office, said in a statement.
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“Spreading outright lies, Randall Crater defrauded dozens of victims out of more than $7.5 million, convincing them their cryptocurrency investments were backed by gold when in reality their hard-earned money went to funding his lavish lifestyle,” he said.
A federal jury convicted Crater in July of wire fraud, unlawful monetary transactions, and operating an unlicensed money transmitting business.
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In addition to eight years and four months behind bars, Crater, of Lake Mary, Florida, was sentenced to three years of probation, ordered to forfeit more than $7.5 million, and pay restitution of an amount to be determined.