Finance

Very young crypto scammer led a luxurious life, but now has to go to jail

The man says he is remorseful, but recently started a crypto company again. Recently, the Amsterdam court sentenced him to 27 months in prison, of which 12 months were suspended. He is appealing.

Day trading cryptocurrencies

The then 24-year-old Pieter J. founded the investment company Bitnextfast in early 2018. With that company, he would become active for his investors in the day trading of cryptocurrencies, such as bitcoin. He predicted a return of 0.5 to 1 percent per day to potential customers.

That return could be paid out at any time. In addition, customers would not run the risk of losing a lot of money, because Bitnextfast would work with a ‘stop loss arrangement’ and a deposit insurance. To instill even more confidence, J. showed some customers around his office in the Amsterdam Zuidas.

Bitnextfast advertised with a slick movie on its own website and on social media such as Facebook. The company claimed to be working with a team of highly experienced crypto traders. In reality, J. hired his father-in-law, a cousin and a friend who had no experience whatsoever as a crypto trader.

Money poured in

The false promises paid off; the money poured into Bitnextfast in early 2018. Within six months, the investment company raised more than 5.6 million euros. The millions came from about 140 people who had no experience with cryptocurrencies, but wanted to take advantage of the hype.

An investigation by the Fiscal Intelligence and Investigation Service (FIOD) showed that J. of the invested millions actually invested just under 700,000 euros in cryptocurrencies. Of the 3.9 million euros that investors invested after May 8, no crypto was even purchased at all.

Luxury lifestyle

The young man spent much of the money on paying off his personal debts and financing a luxurious lifestyle.

For example, he paid around 350,000 euros from his company account for luxury goods such as watches, the rent of an apartment in Amsterdam, hotel stays at home and abroad and the rent of private jets to and holidays in Ibiza, Nice and Monaco.

In addition, he transferred about 650,000 euros to his private accounts, of which he withdrew 278,000 euros in cash. He also transferred 100,000 euros to his own real estate company and 76,000 euros to his girlfriend.

He also transferred 138,000 euros to the account of an acquaintance who then returned that money to him in cash.

Keeping investors happy

The man used another part of the money deposited by his customers to pay “returns” to investors. He also used it to finance the amounts of customers who wanted to withdraw their investment. With this he kept his investors ‘satisfied’, he stated afterwards.

In reality, there was no return. Research by the FIOD showed that the crypto investments only resulted in a loss of more than 325,000 euros. Bitnextfast was therefore not an investment fund, but a pyramid scheme.

Against the lamp

After only six months, J. ran into trouble. In response to signals about suspicious transactions, the FIOD investigative service started an investigation into the man’s activities.

At the end of July 2018, the FIOD and the tax authorities raided the office of Bitnextfast, and J. was arrested.

Famous Dutchmen

At the time, media reported that several well-known Dutch people had also entrusted money to J., ‘including a number of young prominent people from the music industry’. People from the martial arts world in Brabant and criminals would also be among the duped investors.

After completing the investigation, the Public Prosecutor demanded a prison sentence of 3 years, of which 1 year was suspended for fraud and money laundering, among other things.

‘No bad intentions’

During the criminal trial, J. stated that he had grown up among people with a luxurious standard of living, which he had become accustomed to. According to his lawyer, the man never acted with malicious intent. “He intended to trade crypto with the invested money, but it has grown over his head.”

According to his lawyer, the fact that J. spent the investment money of his customers on private expenses should not be seen as theft. The man would have taken that money ‘as an advance’ on the expected return.

New crypto company

During the case, the scammer claimed that he has thought a lot since 2018 and now realizes that he can no longer make money in a fast way. After he gets out of prison, he says he will take a salaried job to pay off his debts.

However, the Public Prosecutor considers the risk of repetition to be high, ‘because of the suspect’s financial problems, his greed for money and the lack of regular income’.

Just before the hearing in this case, J. was actually arrested on suspicion of a similar act. The man appears to have set up another trading company in crypto.

Imprisonment

A ruling shows that the Amsterdam court ruled early last week that J. is guilty of fraud and money laundering, and sentenced him to 27 months in prison. Of these, 12 months are conditional, with a probationary period of two years.

The sentence was lower than the demand of the Public Prosecutor, partly because the case dragged on too long and the man cooperated during the trial. The court also took into account his personal circumstances, as the father of a family with three young children.

Victims to curator

The claim for damages submitted by a large number of aggrieved investors in the criminal case was not honored by the court. They must submit their claims for damages to the trustee, who will settle the personal bankruptcy of J. and the bankruptcy of his crypto company.

Lawyer Michael Berndsen says his client has “no comment at this time” on the conviction and the creation of his new crypto company. Berndsen does let us know that the man will appeal against the decision of the Amsterdam court.

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