Two Estonian nationals were arrested in Tallinn, Estonia, after being charged with their alleged involvement in a $575 million (€560) cryptocurrency scam and money laundering conspiracy, the US Department of Justice revealed on Monday.
The defendants are Sergej Potapenko and Ivan Turõgin, both 37 years old, who are believed to have defrauded hundreds of thousands of victims through a multiple scheme.
The department said the two lured their victims into fraudulent equipment rental agreements with the defendants’ cryptocurrency mining service called HashFlare.
Potapenko and Turõgin also forced victims to invest in a fake virtual currency bank called Polybius Bank, which never paid the promised dividends, the Justice Department said.
The department further alleged that the victims paid more than $575 million to the alleged fraudster’s companies, and that both later used the shell companies to launder the proceeds of the fraud and to buy real estate and luxury cars.
The indictment was returned by a grand jury in the Western District of the northwestern US state of Washington on October 27, and was unsealed on Monday.
A representative for Potapenko and Turõgin was not immediately available for comment.
“The size and scope of the alleged scheme is truly astounding,” said Assistant Attorney General Kenneth Polite Jr of the Justice Department’s Criminal Division. “U.S. and Estonian authorities are working to seize and contain these assets and profit from these crimes.”
The department said the case, which they claim was investigated by the FBI, involved at least 75 properties, six luxury vehicles and cryptocurrency wallets.