US Govt updates on victim identification ahead of BitFunder operator sentencing - FinanceFeeds
https://financefeeds.com/us-govt-updates-on-victim-identification-ahead-of-bitfunder-operator-sentencing/
Quote
US Govt updates on victim identification ahead of BitFunder operator sentencing
Since the last conference, the Government has identified 256 user accounts that suffered losses as a result of Jon Montroll’s securities fraud.
As the sentencing of Jon Montroll, the operator of Bitcoin-related services WeExchange and Bitfunder.com, approaches, the United States Government has filed a Letter with the New York Southern District Court informing the Court regarding the Government’s efforts to identify victims of Montroll’s offense and to notify those victims of these proceedings.
Since the last conference, the Government has identified approximately 256 user accounts that suffered losses as a result of the defendant’s securities fraud. The Government has managed to associate names or email addresses to some 230 of those user accounts. The remaining accounts could not be associated with names or email addresses. Based on the Government’s analysis, these victims lost approximately $212,629.32 in total. The total loss figure is based on losses of 2,258.898876 bitcoin and a July 26, 2013 bitcoin price of $94.13 per bitcoin.
For those identified victims residing in the United States, the Government has sent written notice informing them of the April 2, 2019 sentencing proceeding and of their right to be heard in connection with sentencing. For those victims residing abroad, the Government has contacted the relevant foreign Government or provided notice to the identified victims directly. As of the date of the letter (March 26, 2019), the Government has not received any victim impact statements.
As FinanceFeeds has earlier reported, Montroll’s counsel has argued in favor of a probationary sentence. But the Government pushes for a harsher punishment and argues that a sentence within the range of 27 to 33 months’ imprisonment is reasonable and appropriate in this case.
Montroll has pleaded guilty to securities fraud and obstruction of justice for deceiving investors and potential investors of virtual security known as Ukyo.Loan in connection with Montroll’s discovery of a catastrophic computer hack of his business, and for his lies to the U.S. Securities and Exchange Commission during the SEC’s investigation into that hack.
By December 2012, Montroll operated two different Bitcoin-related web services. First, Montroll operated WeExchange, Australia, Pty. Ltd, known as “WeExchange,” which functioned as a bitcoin depository and currency exchange service. Second, Montroll launched “Bitfunder.com,” an online platform that facilitated the purchase and trading of virtual shares in investment opportunities offered mostly by others. Those two services interlinked: Users of BitFunder were required to create a WeExchange account to facilitate BitFunder transactions, and any investments through BitFunder were held on WeExchange in what was referred to as the “WeExchange Wallet.”
Beginning in late July 2013, and continuing for about a month, until August 27, 2013, a hacker or hackers exploited a weakness in BitFunder’s programming code to confer credits to themselves that they did not earn. When Montroll discovered the Exploit, he attempted to cover it up. Montroll transferred a large amount of bitcoin he had stored elsewhere into the WeExchange system to backfill the losses, but did not disclose the fact of the Exploit to his users.
By the early fall of 2013, the Securities and Exchange Commission (SEC) began investigating the Exploit and Montroll’s response. As part of that investigation, the SEC conducted an investigative deposition of Montroll. During that interview, Montroll falsely denied to the SEC that the Exploit had caused losses and falsely claimed that he had managed to detect and halt the Exploit within its first few hours. A few weeks after the initial interview, Montroll admitted that the Exploit had, in fact, been successful and that users’ bitcoins had been taken.
On February 20, 2018, the United States charged Montroll by Criminal Complaint with perjury and obstruction of justice.
On July 23, 2018, Montroll consented to the filing of Information, which charged Montroll with securities fraud and obstruction of justice. That same day, Montroll pleaded guilty, pursuant to a plea agreement with the Government.
The sentencing of Montroll is currently scheduled for April 2, 2019.
Since the last conference, the Government has identified 256 user accounts that suffered losses as a result of Jon Montroll’s securities fraud.
As the sentencing of Jon Montroll, the operator of Bitcoin-related services WeExchange and Bitfunder.com, approaches, the United States Government has filed a Letter with the New York Southern District Court informing the Court regarding the Government’s efforts to identify victims of Montroll’s offense and to notify those victims of these proceedings.
Since the last conference, the Government has identified approximately 256 user accounts that suffered losses as a result of the defendant’s securities fraud. The Government has managed to associate names or email addresses to some 230 of those user accounts. The remaining accounts could not be associated with names or email addresses. Based on the Government’s analysis, these victims lost approximately $212,629.32 in total. The total loss figure is based on losses of 2,258.898876 bitcoin and a July 26, 2013 bitcoin price of $94.13 per bitcoin.
For those identified victims residing in the United States, the Government has sent written notice informing them of the April 2, 2019 sentencing proceeding and of their right to be heard in connection with sentencing. For those victims residing abroad, the Government has contacted the relevant foreign Government or provided notice to the identified victims directly. As of the date of the letter (March 26, 2019), the Government has not received any victim impact statements.
As FinanceFeeds has earlier reported, Montroll’s counsel has argued in favor of a probationary sentence. But the Government pushes for a harsher punishment and argues that a sentence within the range of 27 to 33 months’ imprisonment is reasonable and appropriate in this case.
Montroll has pleaded guilty to securities fraud and obstruction of justice for deceiving investors and potential investors of virtual security known as Ukyo.Loan in connection with Montroll’s discovery of a catastrophic computer hack of his business, and for his lies to the U.S. Securities and Exchange Commission during the SEC’s investigation into that hack.
By December 2012, Montroll operated two different Bitcoin-related web services. First, Montroll operated WeExchange, Australia, Pty. Ltd, known as “WeExchange,” which functioned as a bitcoin depository and currency exchange service. Second, Montroll launched “Bitfunder.com,” an online platform that facilitated the purchase and trading of virtual shares in investment opportunities offered mostly by others. Those two services interlinked: Users of BitFunder were required to create a WeExchange account to facilitate BitFunder transactions, and any investments through BitFunder were held on WeExchange in what was referred to as the “WeExchange Wallet.”
Beginning in late July 2013, and continuing for about a month, until August 27, 2013, a hacker or hackers exploited a weakness in BitFunder’s programming code to confer credits to themselves that they did not earn. When Montroll discovered the Exploit, he attempted to cover it up. Montroll transferred a large amount of bitcoin he had stored elsewhere into the WeExchange system to backfill the losses, but did not disclose the fact of the Exploit to his users.
By the early fall of 2013, the Securities and Exchange Commission (SEC) began investigating the Exploit and Montroll’s response. As part of that investigation, the SEC conducted an investigative deposition of Montroll. During that interview, Montroll falsely denied to the SEC that the Exploit had caused losses and falsely claimed that he had managed to detect and halt the Exploit within its first few hours. A few weeks after the initial interview, Montroll admitted that the Exploit had, in fact, been successful and that users’ bitcoins had been taken.
On February 20, 2018, the United States charged Montroll by Criminal Complaint with perjury and obstruction of justice.
On July 23, 2018, Montroll consented to the filing of Information, which charged Montroll with securities fraud and obstruction of justice. That same day, Montroll pleaded guilty, pursuant to a plea agreement with the Government.
The sentencing of Montroll is currently scheduled for April 2, 2019.
BitFunder and WeExchange Bitcoin Scams Totalling $9 Million Affected Roughly 250 Investors
https://bitcoinexchangeguide.com/bitfunder-and-weexchange-bitcoin-scams-totalling-9-million-affected-roughly-250-investors/
$9 Million Bitcoin Scam Defrauded More Than 250 Victims
https://www.ccn.com/9-million-bitcoin-scam-defrauded-more-than-250-victims
You should contact the resources listed here:
( there is also an Ombudsman whom you can contact if you feel your victim statement or filing has been overlooked or ignored )
https://www.justice.gov/usao-sdny/programs/victim-witness-services
Quote
Victim & Witness Services
The Office’s Victim and Witness Coordinator provides important services to victims and witnesses of federal crimes, including providing information about compensation for expenses and court-ordered restitution.
SDNY Victim and Witness Coordinator
United States Attorney's Office
One St. Andrew's Plaza
New York, New York 10007
1-866-874-8900
Victim Services
The Office is committed to protecting the rights of crime victims. If you are a victim of a crime being prosecuted by our Office, our Victim and Witness Unit can make sure that you are notified of important stages of the case and can help refer you to other agencies that provide important services, including compensation and counseling. Learn about your rights as a victim
Case Updates
In general, the Government attempts to identify each victim in a given case, and to provide those victims with the information relevant to the case through the Department of Justice’s Victim Notification System. In cases where, due to the number of victims involved, or for other reasons, such notification is impracticable, the Government may use other methods to communicate with victims, including posting relevant information online. Click on the links below for more detailed information about specific cases:
If you have been notified that you are required to appear as a witness for the Government in a case or other legal proceeding being handled by this Office, the Victim/Witness Unit will make arrangements for your travel and lodging, which we will prepay. If you are coming from outside the local court area, you should not make travel arrangements yourself.
If you believe a Department of Justice employee failed to provide crime victim rights, you may submit a complaint form.
Marie A. O'Rourke Marie.O’[email protected]
Victims’ Rights Ombudsman
Executive Office for United States Attorneys
Department of Justice
RFK Main Justice Building
950 Pennsylvania Ave., N.W.
Room 2261
The Office’s Victim and Witness Coordinator provides important services to victims and witnesses of federal crimes, including providing information about compensation for expenses and court-ordered restitution.
SDNY Victim and Witness Coordinator
United States Attorney's Office
One St. Andrew's Plaza
New York, New York 10007
1-866-874-8900
Victim Services
The Office is committed to protecting the rights of crime victims. If you are a victim of a crime being prosecuted by our Office, our Victim and Witness Unit can make sure that you are notified of important stages of the case and can help refer you to other agencies that provide important services, including compensation and counseling. Learn about your rights as a victim
Case Updates
In general, the Government attempts to identify each victim in a given case, and to provide those victims with the information relevant to the case through the Department of Justice’s Victim Notification System. In cases where, due to the number of victims involved, or for other reasons, such notification is impracticable, the Government may use other methods to communicate with victims, including posting relevant information online. Click on the links below for more detailed information about specific cases:
- United States v. William Tierney
- United States v. JP Morgan Chase NA
- United States v. St. Lawrence, et al., 16 Cr. 259 (CS)
- United States v. Michael Mendlowitz & Richard D. Hart, 17 Cr. 248 (VSB)
- U.S. v. Pokerstars et al., 11 Civ. 2564 (LBS) (including Full Tilt Poker and Absolute Poker)
- Operation Ghost Click
- United States v. Richard Moseley, 16 Cr. 079 (ER)
- United States v. Travell Thomas, et al., S4 15 Cr. 667 (KPF)
- United States v. General Motors Company (“GM”)
- United States v. Alex Yücel, S1 13 Cr. 834
- U.S. v. Toyota Corporation
- U.S. v. Bernard L. Madoff and related cases
- U.S. v. Chan Ming Fon
- U.S. v. Tsastsin et al., S2 11 Cr. 878 (LAK)
- U.S. v. Anuradha Saad & Richard Adelson (Impath, Inc.)
- U.S. v. Myron Olesnyckyi (Monster) (PDF)
- U.S. v. Ian Stuart
- U.S. v. Mario S. Levis
- U.S. v. Joseph P. Collins
- U.S. v. Avi Ayache et al.
- U.S. v. All Right, Title and Interest of Assa Corp.
- U.S. v. James Nicholson
- Mount Vernon Money Center (MVMC)
- Specialist Cases
- U.S. v. Scott Tucker
If you have been notified that you are required to appear as a witness for the Government in a case or other legal proceeding being handled by this Office, the Victim/Witness Unit will make arrangements for your travel and lodging, which we will prepay. If you are coming from outside the local court area, you should not make travel arrangements yourself.
- Instructions for Witnesses Appearing on Behalf of the United States Government (PDF)
- Victim/Witness Brochure (PDF).
If you believe a Department of Justice employee failed to provide crime victim rights, you may submit a complaint form.
- Complaint Form (English)
- Complaint Form (Español)
Marie A. O'Rourke Marie.O’[email protected]
Victims’ Rights Ombudsman
Executive Office for United States Attorneys
Department of Justice
RFK Main Justice Building
950 Pennsylvania Ave., N.W.
Room 2261
