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Swedish Crypto Scammer Jailed for 15 Years in Gold-Backed Fraud

 

A citizen of Sweden was sentenced to 15 years in prison for manipulating a cryptocurrency scam claiming to pay investors based on the value of gold reserves.

Roger Nils-Jonas Karlsson, 47, and his firm, Eastern Metal Securities (EMS), were charged with a securities fraud, wire fraud, and money laundering in March this year after being prosecuted in the United States following his arrest in Thailand in 2019. Later, he was extradited. 

Karlsson claimed to operate an investment service based on cryptocurrency and investors who participated in EMS from 2012 to 2019 were offered a plan to buy stocks for less than $100 and ultimately realize a return equivalent to 1.15 kilograms of gold. In 2019, 1.15 kg of gold was worth more than $45,000. Today, its worth could be over $58,000.

To participate in the scheme, investors were asked to buy shares through cryptocurrencies: Bitcoin (BTC) and Ethereum (ETH). Moreover, merchants had been instructed that in case of the ‘unlikely’ occasion wherein the shares fail to attain their promised worth, participants would have 97% of their initial investment returned.

Karlsson ensured that EMS remained functional for the longest possible duration, he did so via frequent rebranding and issuing updates offering asset statements. Additionally, he misleadingly argued that paying out an unlimited sum all of sudden, would have a damaging impact on international monetary methods, and the company worked with the US Securities and Exchange Commission (SEC) to explain payment delays.

However, as is commonly the case with extreme return on investment, the promise was too good to be true. Investors found no profit, and instead, Carlson, who also used online aliases such as Steve Hayden, Euclid Deodoris, and Joshua Millard, sucked up cryptocurrencies and used the money to buy properties and a resort in Thailand. US prosecutors estimate that investors have been fooled for more than $16 million.

"Karlsson admitted he had no way to pay off the investors. Karlsson's fraud targeted financially insecure investors, causing severe financial hardship for many of them,” the US Department of Justice (DoJ) said.

In addition to the 15-year sentence, Karlsson has been ordered to forfeit the resort in Thailand, different properties, accounts, and has obtained a financial judgment of $16,263,820. Prosecutors also hope to secure restitution for past EMS investors and an order is expected in court within 90 days.