Alleged Cryptocurrency Fraudster Arrested in Thailand, Charged in Multi-Million Dollar Investment Scheme
In a criminal complaint unsealed today, a citizen of Sweden and his company were charged with securities fraud, wire fraud and money laundering in a scheme to defraud potential investors.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney David L. Anderson for the Northern District of California and Special Agent in Charge Kelly R. Jackson of the IRS Criminal Investigation’s (IRS-CI) Washington, D.C. Field Office made the announcement.
In a complaint filed March 4, 2019, and unsealed today, Roger Nils-Jonas Karlsson and his company, Eastern Metal Securities (EMS), were charged with engaging in a scheme to defraud victims of more than $11 million.
According to the complaint, since September 2006, Karlsson allegedly used websites to communicate false representations to victims in a scheme to defraud potential investors. For example, one website, www.easternmetalsecurities.com, allegedly was registered to a fictitious person and advertised shares in a product called a “Pre Funded Reversed Pension Plan” (PFRPP). The complaint alleges Karlsson used the website to invite potential investors to purchase shares of the plan for $98 per share in exchange for an eventual payout of 1.15 kilograms of gold per share, even though as of Jan. 2, 2019, 1.15 kilograms of gold was worth more than $45,000. Karlsson also allegedly advised investors that, in the unlikely event that the gold payout did not happen, he guaranteed to return to them 97 percent of the amount they invested. According to the complaint, the government found no evidence of any accounts held by Karlsson that would allow him to pay off the investors. Instead, the complaint alleges, the funds provided by victims were transferred to Karlsson’s personal bank accounts and now appear to be tied up in real estate in Thailand.
The complaint further describes how Karlsson allegedly used a second website, www.hci25.com, to make multiple false communications to potential investors. Karlsson allegedly brought the investors in HCI25 together with the investors in the PFRPP and posted multiple communications to delay the moment investors would realize there would be no payout. For example, on one occasion, Karlsson allegedly explained that a payout had not occurred because releasing so much money all at once could cause a negative effect on financial systems throughout the world. Karlsson also allegedly falsely represented that EMS was working with the U.S. Securities and Exchange Commission to prepare the way for a payout.
The complaint alleges Karlsson directed his victims to make investments using virtual currencies, such as Bitcoin. Karlsson allegedly defrauded no less than 3,575 victims of more than $11 million.
Karlsson was arrested on June 18 in Thailand. The United States is seeking his extradition to stand trial in the Northern District of California.
A criminal complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Trial Attorney Catherine Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney William Frentzen are prosecuting this case with the assistance of Bridget Kilkenny. This prosecution is the result of an investigation by the IRS-CI Washington, D.C. Cyber Crimes Unit. Significant assistance was provided by the Criminal Division’s Office of International Affairs, the FBI Legal Attaché Office in Thailand, the IRS Criminal Investigation Attaché Office in Hong Kong and the Royal Thai Police Crime Suppression Division.