Fraudster Ordered to Pay $36 Million in Crypto Scam

A federal judge has ordered fraudster William Koo Ichioka to pay over $36 million in crypto fines and restitution for his role in a fraudulent crypto and forex scheme. This significant legal action highlights the growing scrutiny on fraudulent activities in the cryptocurrency space.

A Elaborate Ponzi Scheme Unveiled

Ichioka presented himself as a “self-made investor” with a “multimillion-dollar fortune.” He lured over 100 investors into his scheme by promising a 10% return on their investments every 30 business days. Claiming to invest their funds in securities and commodities—including cryptocurrency—he convinced them that profits would come from crypto arbitrage, futures and derivatives, and foreign exchange (forex) transactions.

Misuse of Investors’ Funds

While some money was indeed invested in forex and digital asset commodities, Ichioka commingled investors’ funds with his own. He used their money to cover personal expenses such as his residence, dining, shopping, gym memberships, and online purchases. To hide his fraudulent activities, he provided fake financial documents and false account statements that overstated the value of assets he held on behalf of his clients.

Legal Repercussions and Sentencing

In January, Ichioka pleaded guilty to multiple criminal charges brought by the Department of Justice (DOJ), including wire fraud, preparing false tax returns, and securities and commodities fraud. Alongside the hefty fines and restitution, he received a four-year prison sentence. The court also barred him from trading in markets regulated by the U.S. Commodity Futures Trading Commission (CFTC) and from registering with the CFTC.

Authorities Speak Out

First Assistant United States Attorney Patrick Robbins commented on the case: “Ichioka lured his victims by falsely promising they would receive huge returns quickly on their investments. During the years that he ran his cryptocurrency-based Ponzi scheme, Ichioka managed to defraud more than 100 investors of tens of millions of dollars. Today’s sentence illustrates that lengthy prison terms await all those who seek to swindle investors in this district.”

The case of the fraudster ordered to pay $36 million in a crypto scam serves as a stark reminder of the risks associated with fraudulent investment schemes in the cryptocurrency and forex markets. Investors should exercise caution and conduct thorough due diligence before entrusting their funds to any investment opportunity. Regulatory bodies like the CFTC and DOJ continue to take action against fraudsters to protect investors and maintain market integrity. This legal outcome reinforces the message that those who engage in deceitful practices will face severe consequences.