Two US government agencies are taking legal action against the founder of a cryptocurrency project who allegedly plotted a scam and evaded taxes, spending the resulting money on a lavish lifestyle.
Scam and tax evasion to live in luxury
According to an indictment filed in the United States Southern District Court in New York last week, the Internal Revenue Service (IRS) charged Amir Bruno Elmaani, aka “Bruno Brock,” with two counts of tax evasion.
Elmaani, who created a blockchain protocol called Oyster Pearl, is presumed to have earned "millions of dollars" from an initial coin offering of his cryptocurrency pearl (quotation PRL in real time) in 2017.
Those tokens would be used to purchase storage for online data that powered the Oyster protocol. According to the Department of Justice (DoJ) indictment, Elmaani used $ 10 million in proceeds to purchase several yachts (where he kept gold bars) and real estate, as well as spending $ 1,6 million on a company that makes products. carbon fiber.
Now Elmaani could face up to 10 years in prison. Meanwhile, the Securities and Exchange Commission (SEC) filed a separate civil action against Elmaani. He is accused of conducting an illegal offering of PRL token securities and profiting from "minting millions of unauthorized tokens for himself at no cost and selling them on the secondary market, thereby plummeting the value of others' tokens."
Exit scam
Starting in October 2018, Elmaani leveraged a smart contract on the Ethereum blockchain to create new tokens to sell at a lower-than-market price before creating new ones for free.
At the time, Elmaani had said he was withholding millions of PRLs as a "founders' share" and in the process said he had to move his PRL tokens to a different wallet to avoid double taxation.
By inflating PRL's fixed offering through its access to the protocol, Elmaani is said to have been able to convert its newly minted PRL tokens into other cryptocurrencies using an "overseas-based exchange".
Upon discovering this alleged foul play, the exchange ceased all trading for PRL, which penalized investors holding this token. The SEC said: “Elmaani made about $ 570.000 illegally through the minting and sale of Pearl tokens and, as a result of his sales, the price of Pearl tokens fell by nearly 65%, resulting in significant losses for investors. ".
Elmaani used a coin mixer - a service designed to hide the true origin or destination of cryptocurrencies on a given blockchain - before transferring funds to family and friends, after which he transferred them to his own accounts, according to the DoJ.
"The basic scheme was old-fashioned tax evasion and evasion," said Audrey Strauss, a Manhattan attorney. "Thanks to the criminal investigation division of the FBI and the IRS, Elmaani is now in custody and facing federal prosecution."
