Ex-Athlete Behind Bars in Jaw-Dropping Crypto Mining Ponzi Scheme—Here’s How It Crashed
Another day, another crypto scandal—this time with a side of broken dreams and orange jumpsuits. A former sports star just got slapped with jail time for running a Ponzi scheme disguised as a 'revolutionary' mining operation. Classic.
The Pitch: Too Good to Be True (Spoiler: It Was)
Promising sky-high returns from a 'proprietary mining rig,' the scheme lured in investors with the oldest trick in the book: greed. Turns out, the only thing being mined was their bank accounts.
How It Unraveled
When withdrawals froze faster than a DeFi hack, regulators swooped in. Audits revealed the operation was shuffling new investor funds to pay old ones—the financial equivalent of a treadmill to nowhere.
The Fallout
Another cautionary tale for crypto’s wild west. Meanwhile, Wall Street bankers sip champagne and short Bitcoin with your 401(k). Stay skeptical, folks.
Prosecutors Detail Scheme and Financial Misuse
According to a press release from the US Department of Justice, Moore operated a company called Quantum Donovan LLC between January 2021 and October 2022. He allegedly told investors that their funds WOULD be used to purchase cryptocurrency mining equipment and promised them a 1% daily return.
However, no such mining equipment was ever purchased. Instead, Moore used the invested funds for personal expenses and to repay early participants in a classic Ponzi scheme structure.
During the sentencing hearing, US District Judge Tana Lin emphasized the psychological and emotional toll on Moore’s victims. Many of the investors were individuals Moore met through his rugby connections in Washington, Oregon, Utah, Connecticut, and New Jersey.
Assistant US Attorney Brian Wynne noted in court filings that Moore used investor funds to finance personal living expenses, including luxury travel, clothing, electronics, and apartment deposits.
The fraudulent operation worked by using money from newer investors to send returns to earlier ones, creating the illusion of a functioning mining business. To reinforce the scheme’s credibility, Moore occasionally sent cryptocurrency to some investors.
This, prosecutors say, was meant to convince them the mining operation was real. However, none of the funds were ever allocated to mining hardware or infrastructure.
The Justice Department highlighted that Moore’s actions led to substantial financial losses. While over $900,000 was collected in total, victims were left with a combined loss of more than $387,000.
The discrepancy stems from Moore’s use of new investments to partially refund earlier ones, sustaining the deception over a 21-month period.
DOJ and FBI Urge Caution Amid Crypto Fraud Risks
The Federal Bureau of Investigation conducted the probe into Moore’s activities, with the case prosecuted by Assistant US Attorneys Brian Wynne and Casey Conzatti.
Acting US Attorney Teal Luthy Miller noted that Moore capitalized on the emerging popularity of cryptocurrency to commit a familiar FORM of fraud. “He used the newness of cryptocurrency to commit an age-old fraud—a Ponzi scheme,” Miller said.
Moore’s sentencing reflects a broader push by US authorities to crack down on fraudulent cryptocurrency investment schemes. According to the FBI’s 2023 Internet Crime Report, crypto-related fraud has surged in recent years, particularly scams promising high-yield returns through mining or staking.
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