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• The victims were instructed to purchase shares in Eastern Metal Securities, the name he made up for the Ponzi Scheme.
• Karlsson primarily targeted investors who were financially unstable.
• In its sentencing memorandum, the government said that it was one of the largest Ponzi Schemes that they have encountered.
Roger Nils-Jonas Karlsson, 47 from Sweden was arrested and sentenced to 15 years in prison after the Justice Department found out that he was involved in a Ponzi Scheme. Karlsson was found guilty for several securities fraud, wire fraud, and money laundering charges owing to his role in the Ponzi scheme which scammed millions of dollars from people. According to court documents, the victims were instructed to purchase shares in Eastern Metal Securities, the name he made up for the Ponzi Scheme. Ponzi Schemes are basically a type of investment fraud where existing investors are paid from the investments made by the new ones. Ponzi Schemes have become a concern for security regulators as they continue to grow in number.
Investors Were Promised Returns in Cryptocurrencies like Bitcoin
However, in this Ponzi Scheme the investors were lured into the trap after they were told that they would receive a big sum in bitcoin and other cryptocurrencies. But, all the investments made by them went directly to Karlsson’s personal bank account. He later consumed them to buy homes, a racehorse and even a resort in Thailand. As per the Justice Department, Karlsson primarily targeted investors who were financially unstable, causing them great difficulties after the fraud. While continuing with his scheme, Karlsson even considered rebranding, offering updates and account statements to offer the investors a sense of security.
The Judges Have Forfeited Karlsson’s Properties and Accounts
He pleaded guilty for his frauds on March 4, 2021. He started his Ponzi Scheme back in 2011 and continued it until was arrested in 2019. While the scheme was active, he even apologized to the investors for the payout delay and told big lies that the company was working closely with the Securities Exchange Commission. Government explain’s Karlsson’s case as an 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. In its sentencing memorandum, the government said that it was one of the largest Ponzi Schemes that they have encountered.
Judges have already taken over the Thai resort and other properties and accounts owned by Karlsson and issued a money judgment in the amount of $16,263,820. On behalf of the victims, the United States has been seeking restitution which is to be entered by the court within 90 days. The acting U.S. Attorney Hinds, said that the 180-month prison term would give Karlsson time to think as well as repent about the immense harm he has caused to his victims. The U.S. Attorney’s Office for the Northern District of California has encouraged the victims to submit information.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
