U.S. authorities have accused the founders of dubious cryptocurrency investment platform Forsage, Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev and Sergey Maslakov, of orchestrating a global pyramid scheme that defrauded investors of approximately $340 million.
All defendants are charged with conspiracy to commit wire fraud, which carries a maximum penalty of 20 years in prison. A federal grand jury in the Oregon area claimed that Forsage’s founders portrayed the platform as a legitimate decentralized Matrix project based on network marketing and smart contracts.
Russian executives also described their business as a lucrative investment opportunity, attracting investors. Assistant Attorney General Kenneth A. Polite, Jr., Criminal Division, Department of Justice commented: “Together with our partners, the department is committed to holding accountable fraudsters who defraud investors, including in the emerging DeFi space. Today’s indictment demonstrates the department’s use of all available investigative tools, including blockchain analysis, to The ability to detect sophisticated fraud involving cryptocurrencies and digital assets."
Authorities emphasized that the defendants organized their alleged scam on the Ethereum, Binance Smart Chain, and Tron blockchains. Further analysis showed that earlier investors received funds paid by newcomers, representing the main principle of MLM.
According to investigators, more than 80 percent of Forsage users received less ETH than they invested in the platform’s Ethereum initiative, while half of investors never received a payout. The founders also presumably coded one of the accounts (dubbed “xGold”) so that “100% of revenue flows directly, transparently, and with zero risk to project members.”
Luis Quesada, assistant director of the FBI's Criminal Investigations Division, said advances in the cryptocurrency industry can be a double-edged sword, as bad actors can take advantage of them and potentially cause significant financial damage to unsuspecting victims.
Criminals urge people to be extra cautious when entering the digital asset space and to perform proper due diligence before transferring funds or providing personal information to organizations or unknown individuals.
If convicted, Okhotnikov, Oblamska, Sergeev and Maslakov face up to 20 years in prison. Last summer, the SEC charged 11 individuals tied to Forsage, including the four Russian founders. It insists the platform operated as a crypto Ponzi scheme for two years and extracted more than $300 million from victims.
The regulator also issued cease and desist letters to the platform in late 2020 and March 2021. Still, its executives ignored the request and continued to advertise their business.
Two of the defendants agreed to pay forfeiture and civil monetary penalties to settle matters with the SEC and to be released from further investigation.
