Posted 2 years ago | by @devadmin
An alleged leader of a crypto Ponzi scheme that managed to garner $35 million for false crypto mining and other investments tried to escape the FBI on a “sea scooter” underwater.
Matthew Piercey is accused of being the mastermind behind two fraudulent firms, Family Wealth Legacy LLC and Zolla Financial LLC. It’s claimed that Piercey deceived investors by asking them to invest in cryptocurrency mining, life insurance, and other assets that he didn’t own.
The FBI recently arrested him after he tried to escape using an underwater “sea scooter like he was some James Bond villain.
According to a report from The Sacramento Bee, Piercey tried to dodge FBI agents for longer than an hour and first sought to escape with his truck from his residence in Redding, California. On his way to the Interstate 5 highway, the scam operator then went off-road twice until he eventually abandoned his vehicle on the edge of Lake Shasta.
“Then, Piercey abandoned his truck near the edge of Lake Shasta, pulled something out of it, and swam into Lake Shasta,” federal prosecutors wrote in court documents calling Piercey a flight risk. “Piercey spent some time out of sight underwater where law enforcement could only see bubbles. He remained in the frigid water for approximately 25 minutes.”
The scammer then used a sea scooter Yamaha 350Li submersible device, a water-propelled tool that helps divers move underwater, and spent almost half an hour submerged before he was arrested by authorities who were waiting for him to arise from the lake.
Piercey has been charged with multiple counts, including — wire fraud, mail fraud, money laundering, and witness-tampering concerning his fraudulent investment firms’ operations. Together, the firms managed to swindle $35 million by cheating thousands of investors. The firms primarily targeted wealthy investors, with minimum investments capped at $50,000.
Piercey even allegedly admitted to one of his associates that one of his companies’ “Upvesting Fund” did not exist. He is also thought to not know about cryptocurrencies and essentially used it as a buzz word. Joshua Kons, a lawyer representing clients of Family Wealth Legacy, stated:
“I don’t know they knew what they were doing with the crypto,” Kons said.
Piercey is also alleged to have an accomplice Kenneth Winton who is believed to have spent $3 million or more in renovating homes, paying credit card bills, and even buying a houseboat. The two men accused also used $8.8 million of funds raised to pay back earlier investors as profits tricking them into thinking their business was legitimate.
“Of the remaining net investment of approximately $26 million, few if any liquid assets remain to repay investors,” the prosecutors said.
Winton has been charged with conspiracy to commit wire fraud and is scheduled for his initial court appearance on Thursday.
Winston’s attorney claims his client is innocent and they are looking forward to the judicial process.
“Mr. Winton voluntarily is coming before the court to defend these charges,” said Winton’s San Francisco attorney, Adam G. Gasner. “He looks forward to the judicial process shedding light on what actually occurred here.”
Piercey could face 20 years if he’s proven guilty, while Winton will likely face fewer charges and time in jail if he cooperates with the ongoing investigation. Both men face the potential of hundreds of thousands of dollars in fines if convicted.
In the past year, the FBI and U.S. have been going after many scammers trying to track down cryptocurrency wallets and unregistered trading services like Bitmex, who also stands accused of fraud.
Bitcoin is currently trading at [FIAT: $17,842.65] UP +5.2% in the last 24 hours, according to Coingecko at the time of this report.