Crypto Pyramid Scheme: German CEO Charged with $150 Million Fraud
U.S. prosecutors on Friday announced charges against German citizen Horst Jicha for allegedly defrauding tens of thousands of investors out of more than $150 million through a crypto pyramid scheme.
Jicha, founder and former CEO of USI Tech, was arrested in Miami last month and arraigned in federal court in Brooklyn on four counts, including securities fraud and money laundering conspiracies.
Key details per the indictment:
- Jicha promoted USI Tech as a crypto mining and trading platform.
- False claims had about 140% potential returns for investors.
- Over $150 million in investor funds were transferred to Jicha’s accounts.
- USI Tech U.S. operations were terminated in 2018 amid scrutiny.
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Fake Returns Used to Lure Crypto Investors
According to prosecutors, Jicha and unnamed co-conspirators aggressively touted USI Tech’s cryptocurrency investment program through websites, events, and social media.
This included touting phony potential returns of upwards of 140% and falsely claiming regulatory approval. In reality, the prosecutors stated that USI Tech operated as a pyramid scheme dependent on new investor funds to pay existing clients, as the indictment states.
When regulators began probing USI Tech in 2018, Jicha allegedly terminated the company’s U.S. operations without allowing investors to withdraw their funds. Since 2018, prosecutors say more than $150 million in investor money has been transferred to accounts controlled by Jicha personally.
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Jicha had avoided traveling to the U.S. for over five years until last month when he was apprehended entering the country for a Miami vacation. Defense attorneys for Jicha said they “look forward to zealously defending the allegations” and bringing forth facts about their client’s involvement with USI Tech.
With crypto pyramid scheme and other crypto frauds on the rise, the charges against the USI Tech founder exemplify heightened legal scrutiny of those perpetrating such crypto pyramid schemes targeting retail investors.
