In a little over a decade, cryptocurrency has gone from being a mostly obscure concept to being recognizable around the world. A big part of why we know about tokens like Bitcoin and Ether is because cryptos as a whole tend to be very profitable. You can trade them speculatively and maybe even make money off your investments.
You can also gamble with crypto at a traditional or an anonymous casino. If you are lucky with your bets you might be able to receive an instant payout that is worth several times your initial wager. Nowadays, these online casinos are more popular than ever, thanks to the security, round-the-clock customer service, and privacy that they provide.
There is, however, a dark side to crypto. For every legitimate crypto investment vehicle, there are scammers peddling all sorts of schemes.
A recent crypto scam involves two different New Jersey men who conned victims out of millions of dollars.
The Influencer Scammer
The first scammer is a 28-year-old man named Jebara Igbara, who goes by Jay Mazini on social media. The New Jersey man started a crypto investment firm called Hallal Capital LLC during the COVID-19 pandemic and reached out to members of the Muslim community that he was a part of.
He promised people that he would help them trade stocks, digital assets, electronics, and PPE. To bolster his reputation and earn trust, he posted a series of videos online where he would give away money. In these videos, he gave money to workers at fast-food restaurants and people buying groceries. He even had the rapper 50 Cent appear in one of these videos.
Soon, he gained a million followers on Instagram and this created a funnel of victims who would give money to what was essentially a Ponzi scheme. Igbara got a reported $8 million in total from his victims, including at least 4 people who sent him $100,000 in Bitcoin. One victim told the authorities that he sent Igbara 50 Bitcoin and was told that a $2.56 million transfer had been initiated but it never came through.
All this money was going towards Igbara’s lavish lifestyle which included flashy cars and a gambling habit. Soon, people began to notice his lies and call him out on social media, which made him very desperate to maintain his image. He has admitted that he had at least one witness kidnapped and in 2021, was arrested on kidnapping charges, besides his current charges of fraud.
He was given a five-year sentence for the kidnapping charge, as well as a seven-year sentence for fraud. He will also have to pay back $10 million to his victims who he has apologised to in court.
Speaking on the case, Breon Peace, U.S. Attorney for the Eastern District of New York noted how Igbara exploited both his own community and the general economic anxiety following the COVID-19 pandemic.
“Shamefully, he targeted his own religious community, taking advantage of their trust in him so he could spend and gamble their hard-earned money,” he said.
The Corrections Officer Scammer
Another New Jersey man in the news for scamming people using crypto is John DeSalvo, a former corrections officer, who has admitted to defrauding people of over $600,000 in a pump-and-dump scheme. Like Igbara, he leveraged social media to promote a token called Blazar Token in 2021 and soon, got over 200 investors, most of whom were public employees.
He told his victims that the token was one of the most stable in the market and that it would give them high returns over time. In total, he is believed to have raised $620,000 from those looking to profit from the token. He used fake statements to show that he had made a lot of money from crypto to get others to trust him.
But in 2022, he sold off billions of units of the token, causing them to become worthless. In response, he told his victims that the market had simply performed poorly. The $620,000 he gathered from investors was instead used for personal expenses. This is a classic case of both a fake investment scam and a pump-and-dump scheme.
A pump-and-dump scheme is a situation in which a token is promoted to investors with an artificially inflated value and once they have bought into it, the creators sell off massive amounts of the token, crashing its value. In DeSalvo’s case, the funds given to him weren’t even used to buy the toke but were spent on himself.
Luckily, his victims turned to the authorities and he now faces 20 years in prison and a $5 million fine. He will be sentenced in August 2024.
The Menace of Crypto Scams
These two New Jersey men show the lengths that scammers will go to and how they tend to operate. Social media is a common denominator in these cases, as both found their victims on digital platforms and constructed an image of success and generosity to lure them in. In DeSalvo’s case, he went as far as creating fake evidence of successful trades to convince others of his skills as an investor.
Both also tapped into communities that they had been a part of (Muslims and public employees) to take advantage of their trust. They also promised significant returns on investment, more than what is reasonable.
From the United States to the United Kingdom, authorities all over the world have warned consumers to be aware of crypto scammers. Because the space is relatively new and profitable, many are getting involved in it without knowing the ins and outs of how it functions.
This makes them susceptible to criminals like these who promise unrealistic returns in a short amount of time. Crypto crimes are also harder to prosecute as they are decentralized transactions, meaning they are harder to track and impossible to reverse.
These simply highlight the need for proper education about cryptocurrency and caution on the part of the public who might want to invest in it. With this, the number of people falling victim can hopefully be curbed.
