With various forms of theft and conniving methods, Scammers can rob you of thousands and even MILLIONS of dollars. Remember the Monkey Drainer Scam last month? And recently, a man has pleaded guilty to mining fraud!
When navigating the bustling world of crypto and NFTs, you must take extreme precautions and protective measures. Unfortunately, Scammers are getting more creative by the day. If you wish to learn more on how to avoid awful NFT scams, click on our essential article here!
Scam O’clock: Mining Fraud
A New York guy pled guilty to defrauding more than a dozen victims out of 2 Million Dollars the old-fashioned way!
Initially, the customers were supposedly buying cryptocurrency-mining products and services (Crypto-mining computers and Miner hosting services) from Chester J. “Chet” Stojanovich. Little did they know that Chet had other plans for the funds…
The 38-year-old man posed as a dealer of crypto mining equipment from March 2019 to September 2021. He convinced customers of his credibility and persuaded them to purchase mining machines through him. The victims paid in bank wires and cryptocurrency transfers. Allegedly, he took the payments to “arrange hosting services” at a facility in Goose Bay, Canada.
Convincing Victims of the Mining Fraud
Stojanovich went to great lengths and pulled no stops! He convinced his customers that his scheme was legit by simply purchasing about 75 miners from Amazon and eBay. Of course, he used them as décor and props. Catfishing with a dash of Crypto! The mining fraud instigator sent pictures of himself in his make-shift “mining” area to suspicious customers.
In another case, a weary customer demanded to see the so-called mining area. What did Chet do? He went on a 31-hour road trip from New York to Goose Bay with said customer, only to drop him off at the Buffalo airport before they reached the Canadian border. Then, he informed him that he would not be able to see the facility or receive any sort of refund.
Shit hit the fan when Stojanovich pulled a Houdini on his customers. In detail, he avoided communication with customers for a suspicious period, only to resurface two months later. His excuse? The owner of the make-believe “Goose Bay facility” scammed him instead! He explicitly said that the owner had gone bankrupt and run away with their intended equipment. Once a liar, always a liar.
Pushing His Luck
In June 2020, Six victims filed suit against him in a case of mining fraud and “civil RICO violations, breach of contract, fraud, conversion, and unjust enrichment”. But, for good measure, Chet decided to push his luck!
In August and September 2021, the fraudster went on to his next target. In detail, he tried to persuade three mining brokers to purchase $200,000 worth of equipment through him. And he succeeded… Instead of receiving the promised 127 mining machines, the brokers merely acquired 3 miners.
Naturally, they demanded Chet refunds them.
But, how could he possibly refund them and still sustain the lavish lifestyle he was leading with his wife? Chet was used to private jets, limousine rides, parties, and gifts! The Mining Fraud Culprit even paid off $80,000 of his credit card debt with the stolen funds!
Consequently, Stojanovich wrote a myriad of bad checks. Then, he refunded a mere $61,000 of the $200,000 they had paid, mostly from funds misappropriated from another customer…
Mining Fraudster Pleads Guilty
On Tuesday, November 29, Chet pleaded guilty to fraud. According to a report released by the USAO’s Department of Justice, Stojanovich pled guilty to one count of wire fraud and faces a maximum penalty of 20 years in prison.
This case is being handled by the Attorney Office’s Complex Frauds and Cybercrime Unit. And Assistant U.S. Attorney David Raymond Lewis is in charge of the prosecution.
U.S. Attorney Damian Williams said in the release: “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.”
Scams are everywhere. To reduce your chances of getting scammed, carefully curate any suspicious email or link you receive. Or better yet, avoid them altogether! Finally, after this Mining Fraud incident, it appears that old trickster techniques are resurfacing too. So, you better conduct business with reliable and trustworthy sources. Stay tuned for more NFT and crypto-industry breaking news! And remember to proceed with caution!