Topic: The 94% Con by Jon Montroll - page 2. (Read 85009 times)

Judge Richard M. Berman of the New York Southern District Court has cancelled the sentencing of of Jon Montroll, the operator of Bitcoin-related services WeExchange and Bitfunder.com, as the parties in the case disagree on the precise amount of restitution the defendant is due.

The sentencing, scheduled for April 2, 2019 at 12:30 pm, was cancelled yesterday. The Judge ordered counsel for the parties to meet and confer forthwith to determine jointly the precise amount of restitution. Failing that, the parties should propose a date for the hearing to establish restitution, including witness(es) to be called, and documents to be relied upon.

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.

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.

No, the discussion was rooted in factual data about my losses.


Yeah, I'm not very hopeful. Though why you continue to blame this entire sordid affair an nebulous 'hackers', when convicted felon Montroll is complicit, is beyond the bounds of rationality.


You mean Judge Richard Berman? True, I did not get a reply from the judge. But my writing him was what ultimately got me included in the listing of victims.

Did they mention anything regarding a/the investigation against the hackers?

I mean they stole bitcoins, they might be rich now. Well, I doubt they are, those guys usually aren't the smartest so they most probably blew it away just like that. But still. It's either a couple thousand $ or a couple thousand BTC that might or most probably might not be recovered.

Writing Jon Berman, even by mail, was just useless. Not even an answer. Maybe they don't answer outside their jurisdiction.

I know they mentioned in the report that authorities in other countries have been contacted, but does anybody know if anything else can be done if outside of the US (Australia)?

Interesting you now make this query...

Somewhere upthread (https://bitcointalksearch.org/topic/m.49049300), I listed the contents of a letter I sent to the sentencing judge. While the wheels of justice (!) turn slowly, it happens that I was contacted by an FBI Field Agent on 2019 Mar 22. Evidently, my letter had been forwarded from the court to the bureau, and it was this agent's task to verify that I was indeed a wronged party.

If I understand correctly, all creditors of Montroll's various sham businesses should have been contacted by the court for victim statements. However, some (!?) parties (e.g., myself) slipped through the cracks. They were not aware that Montroll defrauded me through WeExchange.

It may be too late to get heard by the court on Montroll's sentencing. However, there is a route of which I have been informed for reporting yourself as a victim. One can engage the process by contacting:

SDNY Victim and Witness Coordinator
United States Attorney's Office
One St. Andrew's Plaza
New York, New York 10007
1-866-874-8900
https://www.justice.gov/usao-sdny/programs/victim-witness-services

I lost 11.87 BTC with in this fiasco. How could I report it?

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.

Those photos are not of Jon Montroll but of a Russian in some other unrelated case.

This week’s calendar for NY Southern District Court still fails to show any indication of Montroll’s sentencing ... http://www.nysd.uscourts.gov/file/news/proceedings-calendar-for-the-week-of-february-25-2

Perhaps his lawyers have been busy and successful making a documentary featuring a fake SOB story for Montroll, on how he’s really a great person and how all the people on this online forum look up to him as a role model...

Lawyers Are Getting Their Clients’ Sentences Reduced By Showing Judges Short Documentaries
But are these films turning courts of law into theaters of law?
By STACI ZARETSKY
Dec 5, 2017 at 3:56 PM
https://abovethelaw.com/2017/12/lawyers-are-getting-their-clients-sentences-reduced-by-showing-judges-short-documentaries/

How Making a Movie Could Keep You Out of Jail | Op-Docs
https://www.youtube.com/watch?v=ZDGOtvmX_Zs

Guess the number came into play with this article: https://steemit.com/bitcoin/@dasusu/see-photos-of-bitcoin-exchange-operator-who-lied-about-6000-bitcoin-hack-arrested-by-the-fbi

I don't know where you got that 30 years figure to begin with. Each count carries a max of 20 years. Less than max is not unusual for first and/or less-egregious offenders.

While the judge can ignore what the prosecution and the defense are arguing for, and impose anywhere between nothing and max, the typical would be that sentencing is somewhere between these two advocated positions.

Newest article in the case is here: https://financefeeds.com/us-govt-seeks-prison-sentence-bitfunder-operator-jon-montroll/

Not sure what the 27 to 33 months refers to. It's not 30 years or is that another felony? Guess we took the numbers wrongly, those 2 years sound way more sane as punishment for a lie to the sec.

I accepted the loss long time ago, but nice to see things are still going on.


Had to giggle here. From my point of view he did the opposite. I remember when things started to become shady he even asked if I have more funds to invest and at the same time when you asked whats going on the response was just 'nda'. At least I already wasn't that stupid back then to even throw more money at him at this point.

However, he tried to recoup the funds ...

If anyone reading this, who was affected by Montroll / Ukyo, and doesn't believe that the most he ought to get is some form of probationary house detention, they should consider putting pen to paper and writing to the same Judge:

http://nysd.uscourts.gov/judge/Berman

However, he tried to recoup the funds (in a way that now proved to be the wrong way) and he had other projects he worked on that might have helped pay funds back.

You might be right with him maybe not getting the big hit to pay back everything, still, he could try.

And 30 years, that's like he murdered someone. Just crazy.