Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Fun on Friday: The Rise of the Crypto Gangster

  by    0   1

I learned a new term this week – crypto gangster.

I have to confess — it sounds kind of cool.

“What do you do, Maharrey?”

“I’m a crypto gangster. So, don’t mess with me.”

The world gangster conjures up images of a scar-faced tough guy carrying a Tommy-gun, right? Well, I get the feeling that’s not really what a crypto gangster is. He’s probably more like a computer nerd in his momma’s basement. Except he has a Rolls Royce in the driveway.

OK, a Rolls? I’m still down! I don’t really carry the tough-guy persona all that well myself.

But then there’s the lesson – crime doesn’t pay.  At least not in the long run.

Roger Nils-Jonas Karlsson is a crypto gangster originally from Sweden. According to Yahoo Finance, he created a company called Eastern Metal Securities (EMS) and offered investors plans featuring shares that were promised to make huge returns in gold stocks. Investors had to purchase the shares using cryptocurrencies including Bitcoin and Ethereum. He managed to run this scam for about 7 years between 2012 and 2019.

Karlsson promised investors if their shares failed to reach a promised value of up to 97% of their original investment, he would return the crypto to their wallets.

You’ll be shocked to learn that the promised returns never materialized, nor did the crypto reappear in investor’s wallets.

Instead, our crypto gangster siphoned off the crypto fund a lavish lifestyle in Thailand – including the purchase of a luxury resort – as in the whole resort. Karlsson reportedly pocketed about $16 million in the scam.

He put off angry investors with stories of SEC regulations trying things up and delaying promised returns. Honestly, this is pretty believable, at least for a while. But I guess the investors finally ran out of patience.

“Karlsson admitted he had no way to pay off the investors,” said a Department of Justice spokesman.

“The investigation into Roger Karlsson’s fraud uncovered a frighteningly callous scheme that lasted more than a decade during which Karlsson targeted thousands of victims, including financially vulnerable seniors, to callously rob them of their assets and all to fuel an extravagant lifestyle surrounded by luxury condominiums and lavish international vacations,” said Acting U.S. Attorney Hinds.  “The court’s decision to order a 180-month prison term reflects the fact that Karlsson’s cryptocurrency Ponzi scheme is one of the largest to be sentenced to date and ensures that Karlsson now will have plenty of time to think about the harm he has caused to his victims.”

Not only did the scam unravel, the long arm of the law eventually caught up with our intrepid “crypto gangster.” The DoJ extradited Karlsson to the US and he ended up getting a 15-year prison term. He also faces a monetary judgment requiring him to pay back the $16 million. He’d better hope there is still some Bitcoin left and it manages to scale new highs — otherwise, he’s going to have a tough time making restitution from prison. He’ll have to make a lot of jailhouse license plates to come up with $16 million.

So, here’s a big uh-oh buried in this story. Do you know how cops use asset forfeiture money to buy cool new toys for their departments? This incentivizes a “policing for profit” mentality that prioritizes investigating “crimes” that can lead to big forfeiture payoffs instead of solving things like murders. Apparently, police in Finland seized a bunch of Bitcoin during the prosecution of a drug dealer. When they finally auctioned it off, it was valued at about $58 million. According to the Yahoo Finance article, a recent police auction of seized cryptocurrency in France netted some $5 million.

This indicates that holding the assets may become an active strategy for law enforcement agencies, as it represents a significant potential source of future funding for the organizations.”

Get ready for Ferrari patrol cars and Taj Mahal-like police stations.

Who says crime doesn’t pay? Just not necessarily for the criminals.

Fun on Friday is a weekly SchiffGold feature. I dig up some of the off-the-wall and off-beat stories relating to precious metals (however loosely) and share them with you – with tongue firmly planted in cheek. The opinions expressed are my own. They are 100% correct – but not necessarily shared by anybody else here – including Peter Schiff. Click here to read other posts in this series.

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Fun on Friday: The $1 Trillion Coin

Have you heard the latest news on the fake debt-ceiling fight? The Senate has approved a measure to kick the can down the road a couple of months. So, the “fight” will continue! The $480 billion increase raises the debt limit to $28.9 trillion, but that’s only going to last until Dec. 3. That means […]

READ MORE →

Fun on Friday: I Wish I Had This Superpower!

Wouldn’t it be cool if you could just talk and your words would alter reality? It would elevate you to superhero status — or super-villain depending on your propensity to use your power for good or evil. You know, there’s a real-life person who at least appears to have this superpower.

READ MORE →

Fun on Friday: Treasure Hunt

When I walk the beach, I look for sharks’ teeth. Over the years, I’ve developed a pretty good eye for them. In fact, I’ve filled an entire lamp with sharks’ teeth. Not too long ago, I was walking the beach with my son and there were no sharks’ teeth to be found. Frustrated, I told […]

READ MORE →

Fun on Friday: Celebrating Work By Not Working

Labor day is a weird holiday. We celebrate working people by — not working. If labor is so great, shouldn’t we celebrate by doing more of it?

READ MORE →

Fun on Friday: Politicians Lie

I have some sobering news for you. Politicians lie. No, no, not just the politicians you don’t like. I mean pretty much all of them – with a few rare exceptions. It’s like part of the political DNA.

READ MORE →

About The Author

Michael Maharrey is the managing editor of the SchiffGold blog, and the host of the Friday Gold Wrap Podcast and It's Your Dime interview series.
View all posts by

Comments are closed.

Call Now