New York man pleads guilty to cryptocurrency wire fraud scheme

A New York City man pled guilty this week to charges by the U.S. Attorney for the Southern District of New York of wire fraud.

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The man, Chet Stojanovich, pled guilty to defrauding more than a dozen victims of more than $2 million through fraudulent misrepresentations that he would provide them with specialized cryptocurrency-mining computers and hosting services. He said these computers would provide the victims with a lucrative stream of “hash power” convertible into cryptocurrency.

However, Stojanovich misappropriated his victims’ money and failed to provide them with the Miners and Miner hosting services they had purchased from him.

“Cryptocurrency mining has generated much media attention and public excitement in the past few years, but new forms of money and investment can also generate fresh opportunities for old-fashioned fraud. Chet Stojanovich has pled guilty to using those time-worn fraud techniques on this new financial frontier as he stole millions of dollars from victims who thought they were investing in cryptocurrency mining,” Damian Williams, United States Attorney for the Southern District of New York, said.

From at least 2019 until he was arrested in April 2022, Stojanovich controlled various companies, including Chet Mining Co. He allegedly engaged in a scheme to defraud people who were seeking to purchase Miners and Miner hosting services through which they expected to obtain “hash power” convertible into cryptocurrency and money. He defrauded these victims by falsely telling them that he would purchase, and had purchased, Miners on their behalf and that he would provide them with Miner hosting services and had already obtained such Miner hosting services for them.

Williams praised the Federal Bureau of Investigation for its help in this case.

Stojanovich pled guilty to one count of wire fraud, which carries a maximum penalty of 20 years in prison. Stojanovich is scheduled to be sentenced on March 2, 2023, before United States District Judge Denise Cote, who presided over today’s guilty plea hearing.

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