Former New York Times Journalist Caught in $3.5 Million ICO Scam

  • Chinese-American Jerry Ji Guo has allegedly been involved in a $3.5 million ICO-related scam.
  • Guo, a former Newsweek and New York Times journalist, may face up to 20 years in prison for orchestrating fraudulent crypto-related schemes.

Jerry Ji Guo, a former journalist at Newsweek, New York Times, and the Washington Post, has reportedly been involved in a number of scams - including securing funding for a group-dating service from VC firm YCombinator, but then abandoning the project just eight months later.

Guo, a Chinese-American Yale University graduate, has also worked as head chef and owner at a burger joint in Beijing, China and helped start an Atlanta-based “growth hacking” marketing firm. In 2017, Guo launched a $2 million initial coin offering (ICO) to raise funds for a content-sharing program - which he claimed was backed by partnerships with American Idol and The Voice.

On November 9 2018, Guo was arrested by US Federal Bureau of Investigation (FBI) agents in Puerto Rico - on charges for allegedly being involved in a $3.5 million wire-fraud scam. Guo, who refers to himself as a “serial blockchain entrepreneur”, has been accused by American prosecutors of stealing large amounts of digital currency from blockchain startups that employed him as a consultant.

Facing Up To 20 Years Prison Sentence

On Friday, November 30, a San Juan, Puerto Rico federal judge ordered that Guo’s case be transferred to courts in San Jose, California. Notably, the Chinese-American 31-year-old will be facing an eight-count indictment. If found guilty, Guo may be sentenced to 20 years in federal prison by statute.

At a minimum, Guo would have to serve 5 years in prison if found guilty - as law enforcement agents have found that the so-called serial entrepreneur is behind a fraudulent scheme which was allegedly carried out under the guise of a firm called pressICO. According to US federal prosecutors, Guo had been promoting himself as an ICO expert and claimed to have help many projects successfully raise funds and launch innovative products and services.

Claiming To Launch Equitable Content-Sharing Platform 

As payment for his services, Guo allegedly asked his clients to deposit a retainer in what he claimed was an escrowed bitcoin (BTC) and ethereum (ETH) wallet - held with Palo Alto-based crypto firm BitGo.

In addition to promoting the questionable pressICO, Guo had launched another ICO called ICST (Individual Content and Skill Token) - which he said was a content sharing platform that would help talented musicians receive better compensation and recognition for their work.

Notably, Guo released several promotional videos, including one where he is pictured in a luxury yacht in Singapore. In the video, Guo says: “Imagine a future where anyone could be a content creator and be able to monetize their content.” As mentioned, he also claimed that his ICST project had managed to partner with The Voice and American Idol.

Running "ICST Idol" Talent Show

In fact, one of his promotional videos was titled: “Creators of American Idol’s crypto platform tour Asia”. Guo also reportedly ran an online talent contest called “ICST Idol” - which had been scheduled on key dates (before and after his ICO).

The winning prize for the online contest was 100,000 ICST tokens, an amount he claimed would be worth at least $5,000. Although it’s unclear who actually won the contest, Guo walked away with $2.5 million in ether in only 17 days from the ICO.

Shortly after raising the large sum of money, there were no new announcements regarding ICST. Vaibhav Namburi, who was listed as chief technical officer for ICST, told the Daily Beast: 

Ah weird. I helped them in their technical direction, as a technical advisor, for a few weeks and that was about it.

On August 19, Guo moved approximately $300,000 in ETH from ICST’s BitGo account to his personal crypto address, according to US federal prosecutors. Mark Matulich, a special FBI agent assigned to the case, revealed that Guo made many more transfers that same day - which were described as “systematically looting” escrowed BitGo wallets that he had opened on behalf of his clients.

Matulich also noted that Guo’s clients were not expecting that he would be able to transfer the funds by himself - as he had claimed that “he would not be able to transfer the cryptocurrency without their knowledge and consent because of BitGo's multi-signature solution to ensure security of funds.”

However, Guo reportedly bypassed the two-signature requirement by using backup keys that BitGo had provided him at the time he opened the accounts for his clients. In court documents, Matulich has alleged: “Guo provided little to none of the services promised to clients within the contract period.”

Genearing "Fake Facebook Likes", False Claims

Court papers note that Guo’s victims include Rate3 and Pental Global and that the Chinese-American citizen has so far transferred $3.5 million in BTC and ETH to his personal wallets.

The FBI’s investigation also found that Guo had claimed (on his resume) to have managed a $100 million ICO for Polymath. However, Matulich revealed: 

Polymath ended its relationship with Guo after about a month and a half because Guo did not actually do anything … [he also allegedly] generated what they believed were fake Facebook likes for Polymath, thus defrauding Polymath out of approximately $50,000 in up-front fees.

Four More Suspects Arrested in $14.5 Million Cryptocurrency Scam in India

  • A crime uncovered last month involving a fraudulent crypto investment scheme has seen four more Indian men taken into police custody.
  • The 100 Crore, or $14.5 million scam, has been carried out by promoting a fake crypto called "Cash Coin."

The crime branch of the Indian city of Mumbai has reportedly cracked down on another fraudulent cryptocurrency-related investment scheme.

In this particular incident, Indian officials have taken four additional male suspects into custody - after uncovering what appears to be one of several new scams involving cryptocurrencies. According to the Times of India, local authorities have also managed to track down and arrest the “kingpin” or the main individual allegedly involved in orchestrating the recent cryptocurrency crime.

Four Arrested In New Delhi

As detailed in the incident report, Indian police officers from local crime branch unit XII arrested Ashok Goyal Jaipuria, Asif Malpani, Baljit Singh Saini, and Pradeep Arora in India’s capital, New Delhi. The arrests were reportedly made last Monday (March 18, 2019). As noted by local news sources, the men who allegedly carried out the crime, had embezzled 100 Crore (appr. $14.5 million) from several local investors.

Police authorities have now reportedly frozen the bank accounts of the accused - which includes Goyal’s account, who’s believed to be the mastermind of the crypto scam. In addition officials will be questioning a Bollywood actor, which may have presumably been involved in the crime.

Four Others Arrested Last Month

Other individuals arrested last month by Indian authorities include Rajnikant Kumawat, Alpesh Barodia, Sanjay Sontakke, and Kirankumar Panchsara. These four men were also allegedly involved in promoting the same cryptocurrency scam and were taken into police custody from various Indian cities including Surat, Mumbai, and Uttar Pradesh.

According to a report filed by Umeshchand Jain, who’s reportedly one of the victims, the scammers stole Rs. 12 Crore (appr. $1.7 million) from him - after luring him into the allegedly fraudulent crypto scheme. Jain noted the suspects had been conducting promotional seminars throughout India. During these events, the accused targetted local investors by asking them to invest in their questionable cryptocurrency business.

Promising Significant Returns On Initial Investments

Similar to how other scams are promoted, the accused had been promising huge returns on relatively small amounts which were to be invested in a crypto-related investment plan. Commenting on the matter, Sunil Jadhav, a senior inspector at crime branch unit XII, remarked:

The gang launched Cashcoin, a cryptocurrency similar to Bitcoin, a year back, and initially showed profits to few investors and gained their confidence. They thus got more investors and duped them.

Jadhav confirmed that the accused had planned to cheat the victims by promising them at least double in return on their initial investments. As detailed by local news outlets, the Indian crime branch has registered an offense involving “breach of trust, criminal conspiracy under Indian Penal Code and sections of Information Technology Act.”