June 25, 2024

US Attorney Damian Williams, together with FBI Assistant Director James Smith, disclosed an indictment unveiling wire fraud charges against Idin Dalpour for devising a long-standing crypto Ponzi scheme that swindled investors of a whopping $43 million.

The Unsealing of a Wire Fraud Indictment that Reveals a $43M Ponzi Scam

The indictment asserts that over approximately four years from 2020 until April 2024, Dalpour systematically executed a Ponzi scheme related to cryptocurrency, exploiting investors both domestically and internationally.

Alegedly, Dalpour enticed investments by using an entity under his management, Entity-1, professing its involvement in a Las Vegas hospitality business and a crypto trading project.

Contrary to his guarantees, Dalpour exploited new investors’ funds to reimburse the previous investors, effectively turning to a classic Ponzi scheme technique. Ultimately, he cheated investors of no less than $43 million throughout his fraudulent operations.

The investigative report suggests that Dalpour made fraudulent claims that Entity-1 had successfully obtained contracts with a management company and a renowned Las Vegas hotel to rent condos to tourists under the pretense of the Las Vegas hospitality company.

Dalpour also stated that the hotel had organized entertainment packages and held stocks in sports stadiums based in Las Vegas, from which he would supposedly garner a fraction of the revenue from concessions.

These deceptive promises were instrumental in his scheme to lure investors with the allure of significant profits, with the promise of an annual interest starting at 42%. Dalpour went so far as to fabricate contracts, email communications, and bank statements to bolster his unfounded claims.

Falsified Cryptocurrency Trading Enterprise Unveiled

Beyond his Las Vegas venture, Dalpour duped investors with a purported cryptocurrency trading enterprise. He claimed to procure cryptocurrency at wholesale prices and resell it at a markup to individual investors. Similar to the Las Vegas scheme, he guaranteed large annual profits and wrongfully assured investors that their funds were covered by insurance.

In truth, Dalpour never allocated the investors’ money for the said purposes. Instead, he used it to settle earlier investors and fund his personal expenses, including “lavish gambling losses” amassing to around $1.7 million, expenditures exceeding $400,000 from Art Direct, and private tuition fees for his children.

When investors attempted to reclaim their investments, Dalpour supposedly crafted a “complex web of untruths,” arguing that his company’s funds were frozen due to a cyberattack and that a Nevada-based bank was withholding the earnings. Ironically, subsequent findings revealed that Entity-1 didn’t even hold an account with the implicated bank.

In November 2023, Dalpour was confronted by a group of affected investors about the Ponzi scheme. During the showdown, Dalpour confessed to lying to the victims, fabricating contracts and bank records, and improperly utilizing their investments. He even conceded his wrongdoing, admitting he deserved to be incarcerated. Dalpour is now facing charges of wire fraud, with a potential maximum sentence of 20 years behind bars if convicted.

CryptoThe daily trading chart demonstrates the overall cryptocurrency market cap consolidating above the $2.1 trillion threshold. Source: TOTAL on TradingView.com

Featured image sourced from Shutterstock, trading chart from TradingView.com