San Francisco Resident Ordered To Return Stolen Cryptocurrency And Cash To Victims Of Multi-Million Dollar Cryptocurrency Fraud
SAN JOSE – Jerry Ji Guo was sentenced today for his role is a scheme to defraud his clients of cash and cryptocurrency in connection with an initial coin offering, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair. Guo was ordered to pay $4,392,636.14 in restitution, and was sentenced to a term of six months in prison. The sentence was handed down by the Honorable Beth Labson Freeman, U.S. District Judge.
Guo, 33, of San Francisco, pleaded guilty to the charge on August 26, 2019. In pleading guilty, Guo admitted he represented himself as an initial coin offering consultant and promised his clients he would perform marketing and publicity services. Rather than perform these services, Guo embezzled the clients’ cash and cryptocurrency.
“Some criminals believe mistakenly that cryptocurrency is beyond the reach of law enforcement,” said U.S. Attorney Anderson. “This case shows we can use criminal forfeiture to compensate fraud victims even when cryptocurrency is used in the fraud.”
“The FBI is tasked with pursuing crimes and the various means and methods that criminals use to commit those crimes,” said FBI San Francisco Special Agent in Charge Craig D. Fair. “In the financial sector, cryptocurrency has emerged as a significant threat as it affords criminals with a space to conduct activity that is particularly difficult to trace and detect,” he said. “In this case, the FBI relied upon partners in the private sector to respond appropriately to legal process so the FBI could make efforts to locate and seize stolen cryptocurrency.”
A federal grand jury indicted Guo on November 15, 2018, charging him with eight counts of wire fraud, in violation of 18 U.S.C. § 1343. Guo pleaded guilty to one count and the remaining counts were dismissed.
In addition to pleading guilty, Guo agreed to cooperate with the government in the identification and return of property through the forfeiture process. On November 14, 2019, the government obtained a stipulated application for a preliminary order of forfeiture. Further, the government obtained warrants to seize the stolen cash and cryptocurrency, and on February 26, 2020, obtained a final order of forfeiture against the stolen property. Accordingly, the government now is in a position to return the stolen property to the victims.
According to papers filed by the government, the current value of the cash and cryptocurrency is now estimated to be more than $20 million. The Money Laundering and Asset Recovery Section, a component of the Department of Justice’s Criminal Division in Washington, D.C., will use the victim restoration process to return stolen property to victims.
In addition to the prison term and restitution, Judge Freeman also sentenced the defendant to a three-year period of supervised release.
Assistant United States Attorneys Daniel Kaleba and Chris Kaltsas prosecuted the case with the assistance of Elise Etter. The prosecution is the result of an investigation by the FBI.