Topic: [Weexchange issue] The fall of Ukyo III - Updates and references (Read 49953 times)

Well that is pretty dumb. Didn't everyone have to sign up with an email address? Shouldn't everyone then be identfied? I know my email was identified with my account, not sure about my home address. Which would be different by now anyways.

This has some official numbers. Seems, if you are not part of those 256, you aint 'proving' shit  

 https://financefeeds.com/us-govt-updates-on-victim-identification-ahead-of-bitfunder-operator-sentencing/

Posting to come back and read later, but does anyone have a way to verify their lost funds from this? I know I lost some to this scam, but cannot remember how much it was.  Although a quick skim through makes it seem like all is lost anyhow, still would like to know.

Danny Brewster was CEO of NEOBEE. He offered and gave Jon a loan. Thats what the 4% payment we got was about. Danny would have seen and hopefully kept some records of what he saw, or found out. Unless Jon gave him a file of bullshit anyway....

What is his involvement? Was he apart of it or someone who investigated or wuat?

Brewster would have good details of that, i would have thought....and would be a good witness, in the event recovery proceedings went to court.

Posting to come back and read later, but does anyone have a way to verify their lost funds from this? I know I lost some to this scam, but cannot remember how much it was.  Although a quick skim through makes it seem like all is lost anyhow, still would like to know.

The guy has proven tech skills. Order him to pay it back. Let him work and garnish his pay. Put him on probation until every victim is made whole.

Unless you really think he's rotten to the core don't let those 4 kids grow up without a father. Hating the world, hating the government, and hating their dad. You create 4 more victims, an additional burden on taxpayers, and how will he ever repay anyone from prison?

If he fails to keep a job, fails to make payment progress, goes out defrauding people again, or fails to care for his family - then you can wack him with a parole violation and then prison becomes an option.

My $0.02.

That's what I wonder. Didn't it really happen at all? Who did he spoke about when he asked the judge to postpone his sentence because he wants to create some money to reimburse some party. However, I don't have a clue about who he spoke about. I thought maybe there is a lawsuit already.

Also the theft, not sure how old he was at that year, might be some stupid teenage thing, nothing letting judge over to his actual self, maybe.

Ya, look what Uncle Sam did to BFL. Shut them down so they couldn’t even ship products to waiting customers, effectively bankrupting them, then seized what they could for themselves, leaving nothing for the burned customers and in fact actually making it worse for everyone involved.

That’s what government does. Waste everyone’s time, send people to jail, fine them, and then give the middle finger to scammed customers while taking any recovered money for themselves. Once upon a time there were people who believed Bitcoin could end practices like this, but now we seem more concerned with getting it in our government controlled retirement accounts... You can’t make this stuff up people.

The SEC fines I'm pretty sure just go to fund their next investigation.

You can hire a lawyer and file a suit. Honestly surprised it hasn't happened already.

As someone who lost bitcoin to Jon / Bitfunder, I disagree.

Separately, is there any way for retail investors "recover" funds in an SEC fraud case? or does the SEC just get to keep any settlement to themselves, leaving investors high and dry? I'm sure theres a precedent from the hundreds of scams prosecuted yearly.

Yeah, the track record doesn't help.  Without public disclosure, a police report, telling the community the addresses involved, etc you pretty much have to put the responsibility for repayment on him.

With the unpaid taxes, unfortunately things like that happen easily if you don't plan ahead and have an accountant or someone who understands taxes to guide you.  Happens a lot to people running small businesses.  Can't really afford good advice, but can't afford not to either.

Not making up excuses for Jon, but the full list clearly shows that he's not a violent offender and probationary oversight is probably sufficient.

Well, I think he really got hacked but those things somewhat let me doubt it. I mean back then getting hacked with magic internet money, sure, bad decisions easily could happen. Exchanges didn't announce it freely back then. And the total inexperience in these legal areas, well, I can see how it happened, even though I lost my coins because of that. But stealing electronics? And unpaid taxes worth a quarter million? Why?

Does someone here know his actual lawyer? And are there ongoing lawsuits to recover funds from ukyo? Didn't read from one. And is there an ongoing official investigation targetted at the hacker?

Even with all that, it seems crazy that you'd put a non-violent person in federal prison for 20 years.

The guy has proven tech skills. Order him to pay it back. Let him work and garnish his pay. Put him on probation until every victim is made whole.

Unless you really think he's rotten to the core don't let those 4 kids grow up without a father. Hating the world, hating the government, and hating their dad. You create 4 more victims, an additional burden on taxpayers, and how will he ever repay anyone from prison?

If he fails to keep a job, fails to make payment progress, goes out defrauding people again, or fails to care for his family - then you can wack him with a parole violation and then prison becomes an option.

My $0.02.

A hymnbook of legal wrangles accompanies Jon E. Montroll. As early as 1998 he was arrested for stealing electronics from Fry’s computer store in Arlington, Texas.

At the time, he was also guilty of tax evasion, with the County Clerk’s Office in Wilbarger County, Texas, holding a judgment worth $251,546.32 for unpaid taxes against Montroll, a listed defendant in that case. It remains unclear whether the amount was settled with the IRS or whether Montroll remains a fugitive of that judgment.

OmniAmerican Bank successfully obtained a judgment against Montroll and another of his companies, ColoGuys for $36,979.72 in 2010. Whether this contractual debt was ever settled also remains unclear.

The subsequent suing of Montroll for violation of personal rights around the sex tape hosted by Montroll’s ColoGuys illuminated Montroll’s disregard for intellectual property and willingness to illegally smooth things over when he felt it necessary.

Carolyn Murphy, once a Sports Illustrated’s swimsuit model, sued Montroll for his eventual exposure of her sex tape, while the Arizona outfit ICG holds the copyright to the material, an operator of several popular adult websites obtained the rights in 2006.

An excerpt from the tape had been available for free download on a site hosted on servers run by ColoGuys and subsequently Montroll. In spite of a lawyer’s letter demanding the excerpt be taken down, Montroll declined, resulting in ICG eventually suing.

Back to adult reality, let’s note that the counts to which Montroll pleaded guilty and for which he has accepted responsibility are both Class C felonies. The rules provide for maximum term of imprisonment of 20 years. However, the defense notes that a probationary sentence of between one and five years is available.

Judge Richard M. Berman of the New York Southern District Court has adjourned the sentencing to January 24, 2019.


Jon Montroll, operator of purported Bitcoin platform BitFunder, has obtained the Court’s approval of his request to have his sentencing postponed again.

The latest document filings with the New York Southern District Court show Judge Richard M. Berman has granted the defendant’s request. This means that sentencing is adjourned to January 24, 2019.

Montroll has asked for additional time to generate funds that are set to allow him to make a substantial payment towards his agreed-upon restitution obligation prior to sentencing. The defense counsel has explained that Montroll owns and operates two nursing homes in north Texas and expects to receive in December and January reimbursement for services rendered that will allow him to satisfy part of his restitution in advance of sentencing.

Montroll, a/k/a “Ukyo,” operated two online bitcoin services: WeExchange Australia, Pty. Ltd. (WeExchange) and BitFunder.com (BitFunder). WeExchange functioned as a bitcoin depository and currency exchange service. BitFunder facilitated the purchase and trading of virtual shares of business entities that listed their virtual shares on the BitFunder platform.

Between the launch of Bitfunder, in or about December 2012, and at least in or about July 2013, Montroll converted a portion of WeExchange users’ bitcoins to his personal use without the users’ knowledge or consent. He exchanged bitcoins taken from WeExchange into US dollars, then spent those funds on personal expenses, such as travel.

In addition, since July 18, 2013, Montroll has promoted a security referred to as “Ukyo.Loan.” He encouraged investors to “think of [Ukyo.Loan] as a sort of round-about investment” in BitFunder and WeExchange and, at the same time, described Ukyo.Loan as “a personal loan” and “for private investment purposes.”

During the summer of 2013, one or more individuals (the so-called “Hackers”) exploited a weakness in the BitFunder programming code to cause BitFunder to credit the Hackers with profits they did not, in fact, earn. As a result, the Hackers were able to wrongfully withdraw from WeExchange approximately 6,000 bitcoins, with the majority of those coins being wrongfully withdrawn between July 28, 2013, and July 31, 2013. Due to this “exploit”, BitFunder and WeExchange lacked the bitcoins necessary to cover what Montroll owed to users.

Montroll did not disclose what happened to users of BitFunder and WeExchange, or investors in Ukyo.Loan. Instead, he continued to promote and sell Ukyo.Loan to customers and, on at least one occasion, falsely represented to customers that BitFunder was commercially successful. As a result of his omissions and misrepresentations, the defendant raised approximately 978 bitcoins through Ukyo.Loan after his discovery of the Hackers’ actions.

In July this year, Montroll pleaded guilty to securities fraud and obstruction of justice.

The case is captioned USA v. Montroll (1:18-cr-00520).

“My dad likes to do magic for us and other kids. This is the closest way I imagine my dad to lie” – says the son of Jon Montroll, accused of Bitcoin fraud.

All stories, including stories about fraud, have at least two sides. The FinanceFeeds team has been keeping an eye on cryptocurrency fraud cases and has been trying to provide as much detail as possible on some of the major enforcement actions in this respect. Nevertheless, FinanceFeeds’ managing editor has to admit that now and then, it is worth reminding ourselves that all those fraudsters and scammers are human beings too. This has been shown by the sentencing submission filed earlier this week by Jon Montroll, accused of Bitcoin fraud.

The defendant pleaded guilty to securities fraud and obstruction of justice in July this year. As the Court will soon decide on his penalty (he faces a substantial prison term), the defense seeks that the Court sentence Montroll to a period of probation together with conditions of home detention and community service to be determined by the Court.

The sentencing submission includes details about the legal grounds for the defense pushing for such a penalty. The document also includes dozens of letters from Montroll’s friends and community members speaking in his favor.

Montroll is a father to four children, ages to 8 through 12. Although Montroll did not ask for his children to write any letters, one of his sons did so. Below is an excerpt of this letter (the rest contains personal information which FinanceFeeds’ managing editor believes does not need to be disclosed).

“Dear Judge,

I heard my dad asking friends for letters that describe him. I wanted to write a letter too.

Dad told me he made the biggest mistake of his life years ago and now he has to be punished for it and said that we should learn from his mistakes and to not make them and to sure to always be honest. My dad likes to do magic for us and other kids. This is the closest way I imagine my dad to lie. He always shows us how tricks work so I am not sure that counts.

Dad is a kind forgiving father is always very cheerful and fun to be around. He plays games with us. He has taught valuable life lessons like don’t do drugs and don’t smoke. He shows us old and new moves and we always have the best Birthday and Christmas is incredible when things are sad…”

Back to adult reality, let’s note that the counts to which Montroll pleaded guilty and for which he has accepted responsibility are both Class C felonies. The rules provide for maximum term of imprisonment of 20 years. However, the defense notes that a probationary sentence of between one and five years is available.

No info regarding the coins, they are still lost or is there any info pointing to any coins recovered?