July 27, 2022DOJ Link

A federal jury convicted a New York man today in connection with a scheme to defraud investors by marketing and selling fraudulent virtual currency. 

According to court documents and evidence presented at trial, Randall Crater, 51, of East Hampton, founded My Big Coin Pay Inc. (My Big Coin), a purported cryptocurrency and virtual payment services company headquartered in Las Vegas, Nevada, and offered virtual payment services through a fraudulent digital currency, “My Big Coins,” which he marketed to investors between 2014 and 2017 using misrepresentations about the nature and value of Coins. Crater and his associates falsely claimed that Coins was a fully functioning cryptocurrency backed by $300 million in gold, oil and other valuable assets. Crater also falsely told investors that My Big Coin had a partnership with MasterCard and that Coins could readily be exchanged for government-backed paper currency or other virtual currencies. Crater promulgated these misrepresentations through social media, the internet, email and text messages. 

In reality, Coins were not backed by gold or other valuable assets, did not have a partnership with MasterCard and were not readily transferable. Over the course of the scheme, Crater misappropriated over $6 million of investor funds for his own personal gain, including spending hundreds of thousands of dollars on antiques, artwork and jewelry.

In January 2018, the Commodity Futures Trading Commission (CFTC) announced commodity fraud charges against Crater and My Big Coin Pay Inc. The CFTC also filed civil charges against the Chief Executive Officer of My Big Coin, John Roche, and two of Crater’s associates Mark Gillespie and Michael Kruger. 

Crater was convicted of four counts of wire fraud, which carries a maximum statutory penalty of up to 20 years in prison for each count, and three counts of money laundering, which carries a maximum statutory penalty of up to 10 years in prison for each count. He is scheduled to be sentenced on Oct. 27. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Rachael Rollins for the District of Massachusetts, Special Agent in Charge Joseph R. Bonavolonta of the FBI’s Boston Field Office and Inspector in Charge Eric Shen of the U.S. Postal Inspection Service (USPIS) made the announcement.

The FBI, USPIS, and CFTC investigated the case.