Long Island Crypto Scammers Get Jail Time for $12M Fraud Scheme

A father-son team from Long Island faces prison time after orchestrating a $12 million cryptocurrency fraud. The duo’s elaborate scheme promised investors outsized returns but delivered only empty wallets and broken promises.

Court documents reveal they used classic Ponzi tactics—paying early investors with money from new victims while siphoning funds for luxury purchases. The sentencing sends a clear message to would-be crypto scammers as regulators tighten oversight.

Yet in typical Wall Street fashion, the real crime might be how small $12M looks compared to the billions institutional players have vaporized in ’legitimate’ crypto ventures.

Fraudulent investment scheme out of Long Island

According to prosecutors, the father, son and a team of others ran a fraudulent investment scheme for years. They solicited funds from victims by falsely promising high returns through investments in cryptocurrency and foreign exchange markets.

Austin reportedly got funds from friends, acquaintance, startups and small businesses under the guise that he’ll help them find investors from his network of high net-worth individuals. The team reportedly got about $5 million in one deal and $4 million in another.

Instead of delivering on their promise, they used the money to fund a luxurious lifestyle. Prosecutors revealed that they spent on shopping, travel, entertainment, and other personal expenses. The two also used money from new investors to pay off earlier ones, which is a classic Ponzi scheme tactic.

According to U.S. Attorney Jay Clayton, who announced the sentencing of the duo, “Hugh Austin was the leader of a fraud and money laundering scheme that stole more than $12 million from more than two dozen victims. Austin involved his own son in his crimes, working with him to rip off victims and spending investor money on personal expenses, like luxury hotels.”

A combined effort to tackle crime and get restitution

Clayton also thanked the prosecutors and law enforcement partners who were involved in bringing the case to a close, adding that due to their efforts, “Austin will now be held accountable for the harm he caused to individual investors and others.”​

In addition to his sentencing, Austin, who is 62 years old, was ordered to pay $12.66 million in restitution. He also has to forfeit $6,062,564 and a 2022 Jaguar SUV alongside other properties at the time of his arrest.

This case adds to the growing list of cryptocurrency-related frauds in the U.S.The trend has caught the attention of U.S. regulators, and law enforcement agencies report that they have increased efforts to clamp down on such schemes.

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