Young crypto fraudster led a life of luxury, but now has to go to prison

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

Day trading of cryptocurrencies

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

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

Bitnextfast advertised with a smart movie on its own website and on social media like Facebook. The company claimed to work with a team of highly experienced crypto traders. In reality, J. hired his mother-in-law’s boyfriend, a cousin and a friend who had no experience as a crypto trader whatsoever.

The 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.

Research 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 bought at all.

Luxury lifestyle

The young man used much of the money to pay off his personal debts and finance a luxurious lifestyle.

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

In addition, he transferred around 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 property company and 76,000 euros to his girlfriend.

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

Keeping investors happy

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

In reality, there was no going back. Research by 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.

Towards the lamp

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

At the end of July 2018, FIOD and tax authorities raided Bitnextfast’s office 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 figures from the music industry’. People from the Brabant martial arts world and criminals would also be among the duped investors.

After the investigation, the State Attorney demanded a prison sentence of 3 years, of which 1 year was suspended for fraud and money laundering.

‘No bad intentions’

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

According to his lawyer, the fact that J. used his clients’ investment money for 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 fraudster claimed that he has been thinking a lot since 2018 and now realizes that he can no longer make money in a quick way. After he gets out of prison, he says he will take a paid job to pay off his debts.

However, the public prosecutor assesses that the risk of repetition is high, ‘due to the suspect’s financial problems, greed for money and lack of fixed 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 crypto trading company.

Imprisonment

A ruling made public on Friday shows that early last week the court in Amsterdam found J. guilty of fraud and money laundering and sentenced him to 27 months in prison. Of this, 12 months are subject to a probationary period of two years.

The sentence was lower than the claim by the State Attorney, partly because the case dragged on 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 compensation claim made by a large number of aggrieved investors in the criminal case was not honored by the court. They must file their claim with the receiver, who will decide J’s personal bankruptcy and the bankruptcy of his crypto business.

Lawyer Michael Berndsen says his client has “no comment at this time” on the conviction and the creation of the new crypto company. However, Berndsen says that the man will appeal the decision from the court in Amsterdam.

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