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DOJ Cracks Down on Crypto Fraud: Eight-Year Sentence for Ponzi Scheme Architect

Dwayne Golden, a 57-year-old from Harrisburg, Pennsylvania, has been sentenced to over eight years in federal prison for orchestrating a $40 million Ponzi scheme involving cryptocurrencies, as confirmed by the U.S. Department of Justice (DOJ).

The ruling was issued by Judge William F. Kuntz II in a Brooklyn federal court following Golden's guilty plea for conspiracy to commit wire fraud and money laundering in September 2024.

Golden, along with co-conspirators, launched fraudulent investment websites like EmpowerCoin and ECoinPlus, promising high returns through non-existent overseas crypto trading.

Prosecutors revealed that the operations raised over $40 million, only to use new investor funds to pay earlier investors, typical of Ponzi schemes, rather than engaging in legitimate trading activities.

After the schemes collapsed, the defendants obstructed federal inquiries, destroying evidence and providing misleading information to investigators between July 2017 and March 2022.

Golden has been ordered to forfeit approximately $2.46 million in illegal gains, while the court will later decide on restitution for the victims involved.

The DOJ's actions come amid a sharp rise in crypto-related fraud, with reports indicating over $9.3 billion in crypto losses in 2024 alone.

In a related case, five individuals admitted guilt for a separate $36.9 million fraud scheme that targeted U.S. citizens and funneled stolen funds abroad.

As the landscape of cryptocurrency fraud continues to evolve, the DOJ remains committed to safeguarding investors and holding fraudsters accountable, encouraging victims to file restitution claims.

The ongoing crackdown emphasizes the importance of vigilance in the crypto space, where scams are becoming increasingly sophisticated.