This week, a man from New York City admitted to charges of wire fraud brought against him by the US Attorney for the Southern District of New York.
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The individual, Chet Stojanovich, pleaded guilty to duping victims out of $2 million using fraudulent representations. He claimed that the computers would generate a lucrative income stream in the form of hash power, which could then be converted into cryptocurrency.
However, Stojanovich failed to make good on his promises, as he misappropriated funds from his victims who had purchased miner hosting services from him.
“Cryptocurrency mining has gained considerable attention and public interest in recent times, but fresh forms of money and investment can also give rise to traditional forms of deception. Chet Stojanovich has admitted to taking advantage of this new financial domain by using well-worn fraud techniques to steal millions of dollars from individuals who thought they were investing in cryptocurrency mining,” said US Attorney Damian Williams.
Between 2019 and his arrest in April 2022, Stojanovich controlled various companies, including Chet Mining Co. He conducted a scheme in which he defrauded people who were buying goods in the form of miner hosting services, with the hope of using “hash power” that could be converted into money and cryptocurrency. By falsely claiming he had bought miners for his account and that he would offer miner hosting services to them, Stojanovich deceived the victims.
Williams acknowledged the assistance provided by the Federal Bureau of Investigation in the case.
Stojanovich pleaded guilty to one count of wire fraud, which carries a maximum prison sentence of 20 years. His sentencing hearing is scheduled for March 2, 2023 before United States District Judge Denise Cote.