Man Pleads Not Guilty in $1M Cryptocurrency Fraud Linked to Gambling
Man Accused of Running a Fraudulent Crypto Investment Scheme
The U.S. Attorney’s Office in Connecticut has announced charges against a 24-year-old man accused of orchestrating a nearly $1 million cryptocurrency fraud. Authorities say the individual used the illicit funds to support his gambling activities.
Details of the Indictment and Charges
The suspect, E. R., appeared before U.S. Magistrate Judge Thomas O. Farris on February 12 and pleaded not guilty to multiple charges. These include 11 counts of international money laundering, seven counts of wire fraud, and three counts of providing false statements to the IRS, all stemming from this alleged cryptocurrency scam.
Operation of the Scheme and Investor Losses
Between May 2021 and March 2025, E. R. reportedly presented himself as a crypto entrepreneur, promising investors significant returns on their contributions. Instead, he defrauded investors out of approximately $950,000. Initially, he attracted substantial investments and then kept providing false updates on returns that never materialized.
Use of “Gas Fees” to Delay Payouts
When some investors attempted to withdraw their money, E. R. claimed that he needed to cover “gas fees” – transaction costs commonly associated with cryptocurrency transfers – before releasing funds. This tactic convinced some investors to contribute additional money, while others grew suspicious.
Additional Deceptive Claims and Gambling Connection
He also alleged affiliation with an organization, stating that a superior was responsible for managing the funds and authorizing payouts, further complicating the situation for investors.
Released on a $500,000 bond pending further legal proceedings, E. R. is accused of using the defrauded money to finance online gambling. The Department of Justice reports that he likely gambled on Stake.com, resulting in a cumulative loss of approximately $950,000 belonging to multiple victims.
