United States authorities recently charged Horst Jicha, a German businessman, with leading a crypto pyramid scheme that resulted in investors being defrauded of approximately $150 million. The U.S. Attorney’s Office for the Eastern District of New York filed charges including securities fraud and conspiracies to commit wire fraud and money laundering.
Jicha, co-founder of USI Tech, is accused of deceiving investors through an online platform that promised to make investing in cryptocurrencies easy and accessible. However, instead of channeling the funds into legitimate investments in digital assets, the company allegedly operated a multi-level marketing scheme. This scheme encouraged investors to recruit others by promoting products presented as cryptocurrencies.
In 2017, Jicha expanded USI Tech’s operations to the United States, where he aggressively promoted the platform through social media and in-person presentations. In these events, he guaranteed high returns on investments and made false claims about the legality of investment offers.
Federal prosecutors revealed that USI Tech abruptly shut down its U.S. operations in early 2018 after attracting the attention of regulators. This action left many investors with millions of dollars in losses. Much of the misappropriated money, including Ether and Bitcoin, was transferred to cryptocurrency addresses controlled by Jicha.
After USI Tech’s operations in the United States were halted, Jicha fled the country. He remained out of reach of US authorities for about five years until he was arrested in December 2023 while trying to go on vacation in Miami, Florida.
James Smith, assistant director in charge of the FBI, commented on the case, highlighting that honest investors often become victims of schemes that exploit emerging financial opportunities. He highlighted that although Jicha promoted a platform that made investing in cryptocurrencies simple, in reality, it was just a front for his fraudulent scheme. The FBI emphasizes its continued commitment to bringing justice to financial fraudsters, no matter how long it takes.
This case is an important reminder of the need for diligence and caution when investing in emerging opportunities, especially in the volatile cryptocurrency market. Jicha’s story highlights the risks associated with pyramid schemes and the importance of strict regulations in the crypto sector.
The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.