US Charges Tennessee Man in Alleged Crypto Ponzi Scheme
Summary
- The US Department of Justice said it charged a Tennessee man with running a Ponzi scheme that defrauded investors of millions of dollars through purported cryptocurrency investments.
- The man raised funds through Star Credit Holdings by touting high returns and protection of investor funds, prosecutors said.
- Prosecutors said he did not generate legitimate investment profits, used new money to pay returns to earlier investors, and spent more than $1.9 million for personal use.
Forecast Trend Report by Period
US prosecutors have charged a Tennessee man with defrauding investors of millions of dollars through purported cryptocurrency investments, alleging he ran a Ponzi scheme that used money from new investors to pay returns to earlier ones.
Decrypt reported on June 13 that the US Department of Justice said a federal grand jury had indicted a 47-year-old Nolensville, Tennessee, resident over the operation of investment firm Star Credit Holdings.
Prosecutors alleged that Abidi raised money from investors from 2020 to 2024 by promising high returns. He also told investors he held large reserves that could protect their money and falsely claimed to manage far more assets than he actually did, according to investigators.
The indictment said Abidi did not generate legitimate investment profits. Instead, he used funds from new investors to pay purported returns to existing investors.
Prosecutors said Abidi used more than $1.9 million of investor money for himself and his family. They also alleged that he omitted income from the business on his federal income tax returns.
Abidi faces 11 charges, including wire fraud, operating an unlicensed money-transmitting business, aiding the filing of false tax returns and money laundering. If convicted, he could face decades in federal prison.
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