The US is attempting to extradite a Swedish citizen over charges related to wire fraud, money laundering and running a securities scheme that involved duping victims into investing in bitcoin.
According to new court documents released on June 19, the alleged cryptocurrency fraudster Roger Nils-Jonas Karlsson and his company Eastern Metal Securities (EMS), operated a scheme that defrauded over 3500 victims of millions of dollars.
The complaint, which was originally filed in March, stated that Karlsson has been using websites to communicate “false representations” to victims since 2006, luring them into scam investments and false promises. In one instance, Karlsson advertised a “Pre Funded Reversed Pension Plan” (PFRPP) that encouraged investors to purchase $98 shares in a fund he claimed would eventually payout 1.15 kg of gold (worth more than $45,000 as of writing).
Karlsson guaranteed a refund of 97 percent of the principal back to investors in the event the bogus fund failed to achieve its gold payout. According to court documents, Karlsson’s operation was never intended to pay back investors:
The government found no evidence of any accounts held by Karlsson that would allow him to pay off the investors. Instead, the complaint alleges the funds provided by victims were transferred to Karlsson’s personal bank accounts and now appear to be tied up in real estate in Thailand.
The Swede was able to persuade victims that their payments were being delayed due to the massive profit generated in the venture. He also falsely made the claim that his company EMS was working with the U.S. Securities & Exchange Commission (SEC). Per the court documents:
Karlsson allegedly explained that a payout had not occurred because releasing so much money all at once could cause a negative effect on financial systems throughout the world.
In addition to running precious metal schemes, Karlsson also tried his hand in digital currencies, creating an investment proposal that directed victims to make purchases of bitcoin and other cryptos.
Karlsson was arrested in Thailand on June 18 and is facing extradition to stand trial in the Northern District of California. All told, Karlsson is facing charges for defrauding 3,575 investors of more than $11 million but remains innocent until proven guilty.
