A U.S. district judge has sentenced Chester (Chet) Stojanovich to three years in prison for defrauding purchasers of cryptocurrency miners and miner-hosting services in a fraudulent crypto mining scheme that spanned from 2019 until his arrest in April 2022. Stojanovich allegedly defrauded more than a dozen investors of over $2 million through fraudulent misrepresentations that he would provide his customers with specialized cryptocurrency mining computers and miner-hosting services that would yield a lucrative stream of hash power convertible into cryptocurrency.
However, he misappropriated his victims’ money and failed to provide them with the miners and hosting services they had purchased from him. The DOJ further accused him of employing deceptive practices to create the illusion that such miners had been acquired and were being used to provide hash power to those customers.
The Defendant’s Illegal Misadventure
Chester Stojanovich is the founder of a crypto mining enterprise named Golden Bridge Technology, which he used as a front for his fraudulent activities. He enticed his clients to make investments in his purported mining activities by offering mouthwatering returns on investment that attracted customer interest.
Chester claimed he had the technical know-how and mining equipment to launch a profitable cryptocurrency mining operation, thus convincing his customers to buy the mining hardware and hosting services from him. But he did not procure any of the crypto-mining hardware and services and pocketed the investors’ money.
Stojanovich took his clients on a wild goose chase by creating an illusory image of the business’ operations using deceptive tactics. He hired actors to pose as technicians in photos and videos that he then shared with his investors.
In addition to his personal use of the funds, Stojanovich also used Golden Bridge Technology for an unrelated but pricey purchase of a $1.1 million condominium to further his personal interests.
Man Sentenced to Prison for Defrauding Investors in Crypto Mining Scheme
The U.S. Department of Justice (DOJ) declared Chester Stojanovich guilty of one count of wire fraud, to which he pled guilty in November 2021. Judge Denise Cote sentenced him to three years in prison and three years of supervised release, with forfeiture of $2,158,927 and restitution to his victims in the amount of $2,108,927.
The DOJ ensured that justice was served by acting as a watchdog and taking steps against fraudulent crypto schemes, which have caused a sharp increase in the number of scams in the industry. The agency revealed that it is committed to monitoring sham network activities and bringing cryptocurrency fraudsters to justice.
Investors must also take steps to protect themselves by conducting thorough research to avoid fraudulent crypto activities. They should avoid schemes that promise unrealistic returns on investment, use reputable and trustworthy mining businesses with a verifiable track record, and avoid platforms with no transparency about their mining operation.
The sentencing of Chester Stojanovich to three years in prison for his fraudulent activities marked another victory for the DOJ over theft in the crypto mining industry. It also highlighted the importance for users to verify the legitimacy of mining operations before investing to combat fraudulence in the industry.
With new investment platforms emerging daily, investors must be cautious and vigilant as they invest crypto assets. It is only by recognizing the potential for fraudulence and taking adequate steps to protect oneself by conducting thorough research and seeking independent advice that investors can invest with confidence in this evolving market.