The United States is seeking the extradition of a Swedish citizen, Roger Nils-Jonas Karlsson, to face charges of wire fraud, and money laundering in a scheme that saw him and his firm encourage victims to invest using cryptocurrencies such as Bitcoin.
Karlsson and his company, Eastern Metal Securities (EMS), were charged with engaging in a scheme that defrauded more than 3,500 victims of over $11 million and was arrested on June 18 in Thailand.
The United States is seeking his extradition to stand trial in the Northern District of California.
The complainant alleged that Karlsson used websites to communicate false representations to victims since September 2006.
He would use the website to invite potential investors to buy shares of the plan for $98 per share in exchange for an eventual pay-out of 1.15 kilograms of gold per share.
In January, the said amount of gold was valued at over $45,000.
According to the complaint, Karlsson allegedly told investors that, in the unlikely event that the gold pay-out failed, they would receive a 97 percent return of the amount they invested.
But the government failed to find any evidence of accounts held by Karlsson which would enable him to pay off the investors.
Instead, the funds provided by victims were allegedly transferred to Karlsson’s personal bank accounts and are tied up in real estate in Thailand.
Karlsson used a second website to make more communication with potential investors.
He reportedly brought the investors in both websites together and posted multiple communications to delay the moment investors realized the pay-out wouldn’t happen.
On one occasion, he allegedly said that a pay-out had not occurred because releasing so much money all at once could cause a negative effect on financial systems throughout the world.
Karlsson also allegedly said that EMS was working with the US Securities and Exchange Commission to get the pay-out ready.