Cryptocurrency Fraudster Sentenced To 15 Years For Money Laundering And Securities Fraud In Multi-Million Dollar Investment Scheme
One of the largest cryptocurrency Ponzi scheme sentencings ever prosecuted in the United States
SAN FRANCISCO – Roger Nils-Jonas Karlsson, citizen of Sweden, was sentenced today to 15 years in prison for securities fraud, wire fraud, and money laundering charges that defrauded thousands of victims. The court also ordered the defendant to forfeit several properties in Thailand, including a resort, and a forfeiture money judgment of more than $16 million. The sentence was handed down by the Hon. Charles R. Breyer, U.S. District Judge.
Karlsson, 47, pleaded guilty to the charges on March 4, 2021, without a written plea agreement. According to court documents, Karlsson ran an investment fraud scheme from 2011 until his arrest in Thailand in June 2019. Karlsson induced victims to use cryptocurrency such a Bitcoin and other online payment platforms to purchase shares in a scheme he called “Eastern Metal Securities.” Karlsson promised victims astronomical returns tied to the price of gold. Instead, the funds provided by victims were transferred to Karlsson’s personal bank accounts, and he then used proceeds to purchase personal items including expensive homes, a racehorse, and a resort in Thailand. Karlsson’s fraud targeted financially insecure investors, causing severe financial hardship for many of them. Meanwhile, Karlsson went to great lengths to prolong his scheme, including rebranding, offering updates and account statements that provided assurances to the victims that their assets were secure, and offering explanations for the payout delays – including falsely claiming to be working with the Securities and Exchange Commission. In addition, the government’s filings in the case describe Karlsson’s attempt to launder the proceeds of his fraud by using multiple aliases and shell companies, layering transactions through cryptocurrency wallets and exchanges, and using offshore accounts and properties. The government argued in its sentencing memorandum that Karlsson’s cryptocurrency Ponzi scheme is one of the largest such schemes the government knows to have been sentenced.
“The investigation into Roger Karlsson’s fraud uncovered a frighteningly callous scheme that lasted more than a decade during which Karlsson targeted thousands of victims, including financially vulnerable seniors, to callously rob them of their assets and all to fuel an extravagant lifestyle surrounded by luxury condominiums and lavish international vacations,” said Acting U.S. Attorney Hinds. “The court’s decision to order a 180-month prison term reflects the fact that Karlsson’s cryptocurrency Ponzi scheme is one of the largest to be sentenced to date and ensures that Karlsson now will have plenty of time to think about the harm he has caused to his victims.”
The judge ordered forfeited various Thai resort properties and accounts and issued a money judgment in the amount of $16,263,820. The United States is seeking restitution on behalf of Karlsson’s victims. A restitution order is expected to be entered by the Court within 90 days. Victims of Roger Karlsson and Eastern Metal Securities who have not been in contact with the U.S. Attorney’s Office for the Northern District of California are encouraged to submit information as soon as possible. Additional information for victims and a victim form are available at https://www.justice.gov/usao-ndca/united-states-vs-roger-karlsson-and-eastern-metal-securities.
Acting U.S. Attorney Stephanie Hinds of the Northern District of California; Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; and Acting Special Agent in Charge Darrell J. Waldon of the IRS-Criminal Investigation (IRS-CI) Washington, D.C. Field Office made the announcement.
IRS-CI Washington, D.C. Cyber Crimes Unit investigated the case. The Justice Department’s Office of International Affairs, the FBI Legal Attaché Office in Thailand, the IRS-CI Attaché Office in Hong Kong and the Royal Thai Police Crime Suppression Division provided significant assistance.
The Securities and Exchange Commission has filed a separate enforcement action against Karlsson. The announcement of that action can be viewed here.
Trial Attorney C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney William Frentzen prosecuted this case. Assistant U.S. Attorney Karen Beausey of the Asset Forfeiture Unit of the U.S. Attorney’s Office for the Northern District of California (USAO) handled the forfeiture proceedings and Victim Specialist Maria Sunga provided support. Seamus Lynch, John Paul, Kate Kaplan, and Edward Percarpio also provided essential assistance in support of the sentencing. The Department of Justice also appreciates the assistance of the Securities and Exchange Commission.
The Securities and Exchange Commission's Office of Investor Education and Advocacy warns investors to scrutinize investment “opportunities” offered through websites purporting to operate advisory and trading businesses related to digital assets. Additional information is available in the SEC’s Investor Alert on the topic. Victims of investment fraud schemes, including those involving cryptocurrency, are encouraged to report their loss to law enforcement.