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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of New York

FOR IMMEDIATE RELEASE
Monday, September 30, 2019

Principal Of Cryptocurrency Escrow Company Indicted For $7 Million Fraudulent Scheme

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that a grand jury in the Southern District of New York has returned an indictment charging JON BARRY THOMPSON, a/k/a “J. Barry Thompson,” the principal of the cryptocurrency escrow company Volantis Escrow Platform LLC and the related company Volantis Market Making LCC (collectively “Volantis”) with commodities fraud and wire fraud offenses.  As alleged, THOMPSON took over $7 million from two victim companies after making false promises in connection with Bitcoin transactions.  THOMPSON was arrested in July based on a criminal complaint filed by this Office charging him with the same crimes.  The case has been assigned to U.S. District Judge Edgardo Ramos.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, Jon Barry Thompson repeatedly lied to investors in cryptocurrencies about the safety of their investments made through his companies.  As a result of Thompson’s lies, investors lost millions of dollars.”

In a separate civil action, the U.S. Commodity Futures Trading Commission (“CFTC”) today filed civil charges against THOMPSON. 

As alleged in the Indictment and the criminal complaint previously filed in this case:[1]

THOMPSON claimed in promotional materials that Volantis “minimize[d] settlement default risk” in cryptocurrency transactions.  THOMPSON claimed that because Volantis acted as a custodian of assets for “both sides of the transaction, there is no risk of default.” 

 In June and July 2018, THOMPSON made false statements to one victim company (“Company-1”) to induce Company-1 to send Volantis over $3 million to fund the purchase of Bitcoin for Company-1.  THOMPSON falsely assured Company-1 that THOMPSON had the Bitcoin in hand and Company-1’s money could not be lost.  Even though THOMPSON had told Company-1 that before any transaction, “cash is with me, coin is with me,” THOMPSON sent over $3 million of Company-1’s money to a third-party entity purportedly in exchange for Bitcoin without first receiving any of the Bitcoin in hand.  After taking Company-1’s money, THOMPSON lied for days about the status of the transaction and the location of Company-1’s Bitcoin and money, which was never returned. 

In July 2018, THOMPSON made false statements to another victim company (“Company-2”) to induce Company-2 to send Volantis over $4 million to fund the purchase of Bitcoin for Company-2.  After receiving Company-2’s money, THOMPSON sent a substantial portion of the money to a third party without first receiving any Bitcoin in return.  THOMPSON never provided Company-2 with any Bitcoin, nor did he return Company-2’s money.  After receiving Company-2’s money, THOMPSON also lied to Company-2 about the location of the Bitcoin and the status of the transaction.

*                      *                      *

THOMPSON, 48, of Easton, Pennsylvania, is charged with two counts of commodities fraud, each of which carries a maximum sentence of 10 years in prison, and two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Berman praised the investigative work of the Federal Bureau of Investigation and also thanked the CFTC for its assistance. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Jordan Estes and Drew Skinner are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the Indictment, and the description of the Complaint and the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Topic(s): 
Cyber Crime
Financial Fraud
Press Release Number: 
19-311
Updated September 30, 2019