New York Man Arrested for Alleged $1.8M Crypto Mining Scam

The Federal Bureau of Investigation arrested a 37-year-old antheral connected Wednesday it says defrauded much than a twelve victims retired of a full of $1.8 cardinal successful a long-running crypto mining scam.

Between March 2019 and September 2021, officials accidental Chester “Chet” Stojanovich posed arsenic a trader of crypto mining equipment, convincing his would-be customers to fork implicit ample payments for mining machines and miner-hosting services, which Stojanovich promised to put astatine a installation successful Goose Bay successful Canada's Newfoundland and Labrador province.

According to a complaint, Stojanovich ne'er followed done connected his promises and kept the bulk of the wealth for himself.

Stojanovich is not the archetypal idiosyncratic to beryllium accused of moving an elaborate scam involving crypto mining equipment. In 2020, a 60-year-old California antheral was arrested and charged with moving a bid of schemes, including a fake crypto mining cognition that bilked 5 investors retired of $550,000, fractional of which helium spent connected himself astatine casinos, restaurants, and hotels.

Stojanovich’s alleged scam is tiny potatoes compared with different crypto mining grifts. The notorious BitClub Ponzi scheme defrauded investors of $722 cardinal implicit 5 years, purporting to merchantability shares of nonexistent crypto mining pools to gullible investors – lone to wage them backmost with wealth from newer investors.

But dissimilar BitClub, Stojanovich’s alleged scam was not a Ponzi strategy – it was conscionable old-fashioned fraud. He allegedly blew the bulk of his customers’ currency connected chartering flights connected backstage jets and traveling successful limousines, paying disconnected much than $80,000 successful idiosyncratic recognition paper debt, throwing lavish parties and giving wealth to his wife.

According to the complaint, Stojanovich and assorted companies nether his control, including Chet Mining, Chet Mining Canada and Phoenix Data LLC, told investors that helium would acquisition mining instrumentality connected their behalf and past big that instrumentality astatine the Goose Bay installation for a acceptable fig of months.

However, the FBI alleges that Stojanovich did not acquisition the instrumentality arsenic promised, but alternatively “employed deceptive practices to make the illusion that specified miners had been acquired and were being sued to supply hash powerfulness to the accounts of [his] customers.”

Stojanovich allegedly purchased a full of 72 S9 Miners from Amazon, and 2 different miners from eBay, which helium mostly utilized arsenic props successful the scheme. (He took outgo from customers for astir 1,500 S9 miners and implicit 1,500 L3 miners.)

When his customers grew suspicious and asked for grounds of their purchases, Stojanovich would nonstop them photos of the miners helium had bought, arsenic good arsenic photos of himself lasting adjacent the piled-up boxes, according to the complaint.

In 1 instance, an unnamed lawsuit who had ordered 912 S9 miners from Stojanovich insisted that Stojanovich supply impervious of the purchase, including “serial numbers, security argumentation documents oregon shipping documents.” When Stojanovich could not supply the proof, the lawsuit demanded that helium beryllium taken to the purported hosting installation successful Goose Bay – a 31-hour thrust from New York City – to spot his acquisition for himself.

According to the FBI, Stojanovich agreed and, astir Memorial Day play successful 2019, helium and the lawsuit got a rental car and headed to Goose Bay. However, things betwixt the brace crumbled arsenic they neared the borderline of Canada, and Stojanovich allegedly told the lawsuit that helium would not beryllium capable to spot the miners aft all.

The FBI alleges that “the travel ended abruptly, successful Buffalo, New York, wherever Stojanovich abandoned [the customer] astatine the airdrome and stated successful substance and portion that helium would not wage immoderate refund.”

A erstwhile worker of Stojanovich told the FBI that, erstwhile his brag returned from the trip, helium admitted helium had ne'er purchased the S9 miners the lawsuit had paid for.

Stojanovich allegedly continued to usage photos and phony grounds of nonexistent hash powerfulness to soothe disquieted customers, but astir September 2019 helium stopped responding to each texts and emails.

Two months aboriginal helium resurfaced, lone to archer customers that the proprietor of the alleged Goose Bay hosting installation had gone bankrupt and tally distant with their equipment.

Lawsuits and much alleged fraud

In June 2020, six of Stojanovich’s alleged victims filed suit against him and 2 of his companies, alleging “civil RICO violations, breach of contract, fraud, conversion and unjust enrichment.”

According to the FBI, however, being sued did not forestall Stojanovich from trying his manus astatine a 2nd scam. Between August and September 2021, Stojanovich convinced 3 brokers who represented clients funny successful buying mining instrumentality to wage him astir $200,000 for a full of 127 miners.

The customers lone received 3 miners betwixt them, according to the complaint. When they demanded refunds, the FBI says Stojanovich sent a bid of atrocious checks earlier yet refunding lone $61,000 of their wealth – frankincense keeping $119,000 for himself.

According to the complaint, Stojanovich spent this wealth connected “unrelated purchases of net domain names … products of Apple, Inc. … hotels/restaurants, and payments to his wife/partner” arsenic good arsenic “payments of much than $33,000 to an online casino.”

In aboriginal March 2022, Stojanovich was ordered by a New York justice to look astatine a deposition successful the suit filed against him successful 2020. According to the FBI, Stojanovich lied nether oath astir the whereabouts of his cellphone and, erstwhile allowed to instrumentality to his car to get his cellphone, hid for the duration of the deposition, lone returning to the courthouse erstwhile everyone other had left.

After that, Stojanovich allegedly moved to Canada.

His nonaccomplishment to comply with the suit resulted successful a default judgement against him. Stojanovich was recovered to beryllium successful civilian contempt of tribunal – a uncovering that carries with it hefty monetary penalties and imaginable transgression action.

Stojanovich was arrested successful Champlain, N.Y., connected Wednesday and charged with 1 number of ligament fraud, which carries a maximum condemnation of 20 years successful prison. He volition beryllium arraigned successful a Manhattan, N.Y., courthouse connected Thursday.

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