A federal grand jury within the District of Oregon returned an indictment at this time charging 4 founders of Forsage, a purportedly decentralized finance (DeFi) cryptocurrency funding platform, for his or her roles in a worldwide Ponzi and pyramid scheme that raised roughly $340 million from victim-investors.
According to courtroom paperwork, Vladimir Okhotnikov, aka Lado; Olena Oblamska, aka Lola Ferrari; Mikhail Sergeev, aka Mike Mooney, aka Gleb, aka Gleb Million; and Sergey Maslakov, all Russian nationals, allegedly touted Forsage as a decentralized matrix challenge based mostly on community advertising and marketing and “smart contracts,” that are self-executing contracts on the blockchain. As alleged within the indictment, the defendants aggressively promoted Forsage to the general public by social media as a authentic and profitable enterprise alternative, however in actuality, the defendants operated Forsage as a Ponzi and pyramid funding scheme that took in roughly $340 million from victim-investors all over the world.
“Together with our partners, the department is committed to holding accountable fraudsters who cheat investors, including in the emerging DeFi space,” stated Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s indictment showcases the department’s ability to use all available investigative tools, including blockchain analysis, to uncover sophisticated frauds involving cryptocurrency and digital assets.”
According to courtroom paperwork, the defendants allegedly coded and deployed sensible contracts that systematized their mixed Ponzi-pyramid scheme on the Ethereum (ETH), Binance Smart Chain, and Tron blockchains. Analysis of the pc code underlying Forsage’s sensible contracts allegedly revealed that, in keeping with a Ponzi scheme, as quickly as an investor invested in Forsage by buying a “slot” in a Forsage sensible contract, the sensible contract routinely diverted the investor’s funds to different Forsage traders, such that earlier traders had been paid with funds from later traders.
“Today’s indictment is the result of a rigorous investigation that spent months piecing together the systematic theft of hundreds of millions of dollars,” stated U.S. Attorney Natalie Wight for the District of Oregon. “Bringing charges against foreign actors who used new technology to commit fraud in an emerging financial market is a complicated endeavor only possible with the full and complete coordination of multiple law enforcement agencies. It is a privilege to work alongside the agents involved in these complex cases.”
As additional alleged within the indictment, the defendants falsely promoted Forsage to the general public as a authentic, low-risk, and profitable funding alternative by Forsage’s web site and varied social-media platforms. However, blockchain analytics confirmed that over 80% of Forsage traders acquired fewer ETH again than that they had invested in Forsage’s Ethereum program, with over 50% of traders by no means receiving a single payout. Additionally, in keeping with courtroom paperwork, the defendants coded not less than one among Forsage’s accounts (often called the “xGold” sensible contract on the Ethereum blockchain) in a manner that fraudulently siphoned traders’ funds out of the Forsage funding community and into cryptocurrency accounts underneath the founders’ management, which was opposite to representations made to Forsage traders that “100% of the [Forsage] income goes directly and transparently to the members of the project with zero risk.”
“While advancements in the virtual asset ecosystem bring new opportunities to investors, criminals are also finding new ways to orchestrate illicit schemes,” stated Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI remains committed to working alongside our domestic and international law enforcement partners to investigate and pursue subjects who orchestrate these scams and attempt to defraud investors.”
“Technology is always changing and scams and swindles evolve alongside it,” stated Inspector in Charge Eric Shen of the U.S. Postal Inspection Service (USPIS), Criminal Investigations Group. “The U.S. Postal Inspection Service is committed to investigating those who engage in schemes involving cryptocurrency investment fraud, which can cause significant financial harm to unsuspecting victims. We urge individuals to be cautious when considering investments and to always do their due diligence before providing money or personal information to any individual or organization.”
“These individuals are alleged to have used trendy technology and opaque language to swindle investors out of their hard-earned cash,” stated Special Agent in Charge Ivan J. Arvelo of Homeland Security Investigations (HSI) New York. “But, as the indictment alleges, all they were doing was running a classic Ponzi scheme. The technology may change, but the scams remain the same and with the collaboration amongst all our partners, we’re able to see through the phony promises and bring the schemes to light. HSI is committed to being at the forefront of financial investigations, using the full extent of our investigative capabilities to track down criminals no matter what new tricks they use.”
Okhotnikov, Oblamska, Sergeev, and Maslakov are every charged with conspiracy to commit wire fraud. If convicted, the defendants face a most penalty of 20 years in jail.
The FBI Portland Field Office, USPIS, and HSI New York’s El Dorado Task Force are investigating the case.
Trial Attorneys Sara Hallmark and Tian Huang of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Quinn Harrington and Meredith Bateman for the District of Oregon are prosecuting the case.
All investor victims of the Forsage scheme are inspired to go to the webpage www.justice.gov/criminal-vns/case/united-states-v-vladimir-okhotnikov-et-al to determine themselves as potential victims and procure extra info on their rights as victims, together with the power to submit a sufferer affect assertion.
An indictment is merely an allegation. All defendants are presumed harmless till confirmed responsible past an affordable doubt in a courtroom of regulation.