By CCN.com: The United States Attorney’s Office District of Oregon has indicted two Nigerian nationals, Kelvin Usifoh and Onwuemerie Ogor Gift, over a bitcoin fraud scheme which is estimated to have netted them bitcoin worth over $270,000. Among the charges that the two are facing include wire fraud and conspiracy to commit money laundering.
The victims who have come forward are based in Oregon and California. The two accused men have yet to be located as the Feds contemplate triggering an Interpol red notice for help, according to The Oregonian.
— FOX 12 Oregon KPTV (@fox12oregon) April 24, 2019
The two Nigerian nationals marketed their fraud on three websites namely wealthcurrency.com, boomcurrency.com and merrycurrency.com. According to the United States Attorney’s Office District of Oregon, the two promised investors extremely high zero-risk returns. Once victims transferred bitcoin to their cryptocurrency wallets, the two would then exchange it into Nairas.
As early as last year in July boomcurrency.com had already been flagged as a scam on Twitter.
— BinaryOptionsArmy (@binaryoptionsar) July 31, 2018
During the entire duration of their fraudulent scheme, the two are believed to have earned over 50 bitcoins. Since the exact dates when they exchanged the bitcoin to fiat are not indicated, they may received more or less than the approximately $270,000 they would earn today at current rates.
California Resident Loses Bitcoin Worth Over $67,000
One of the victims identified in the indictment document as Adult Victim 3 (AV3) allegedly sent the two 10.1 bitcoins. On June 11, 2018 AV3, a resident of California, sent 8 bitcoins to a cryptocurrency wallet associated with the scam. At the time bitcoin was trading at around $6,800.
AV3 also sent 2.1 bitcoin on June 18, 2018 when the average price of the cryptocurrency was around $6,400.
The fraudulent scheme is estimated to have operated for about two years. It is believed to have been started around March 2017 and ended last month according to the indictment document. However, the scam may still have been running during the first weeks of April.
What is this? A friend just came by and asked me if was legit? Bitconnect instantly came to mind. https://t.co/PYsGghLDuO
— 10 ❤️⚡️North Facing (@BigMikD1) April 13, 2019
Strategies Employed in the Bitcoin Scam
Per the indictment document, the scam involved promising guaranteed unrealistic returns. In one message cited in the indictment document, a victim is promised returns of over 500 percent. Like other similar scams, the returns are supposed to pour in after only a brief period, in this case after only a week of trading:
I can show you a reliable way to trade 0.8Btx and make 3-4Btc after 7 days.
The scammers also went to great lengths to reassure their potential victims whenever they noticed flagging interest or confidence. This included sending their victims text messages telling them ‘Don’t be scared, my platform works 99%. You won’t lose anything’.
To avoid detection, the two Nigerian nationals employed domain protection which conceals the identity of a website owner. One of their websites listed an Indonesian address despite the login IP address indicating a Nigerian presence.
Repeat Business Preferable
Just like mainstream businesses, the two also seemed to have a preference for ‘repeat business’ which no doubt kept their ‘customer acquisition costs’ down!
In one instance, they nudged a victim into adding their investment by telling them it would help with withdrawals. One message to a victim based in Oregon reads:
add .2Btc so you can withdraw successfully.
If convicted the Nigerian nationals will be forced to forfeit to the United States proceeds and properties derived from the crime.
The indictment prompted the SEC’s investor education department to issue an alert giving advice on how to identify scams.