Promoter of cryptocurrency scam Bitclub Network admits securities and tax offenses
Jobadiah Sinclair Weeks, one of the individuals involved in $722 million cryptocurrency mining scheme, has pleaded guilty to conspiracy to offer and sell unregistered securities and tax evasion.
Weeks and four co-defendants – Matthew Brent Goettsche, Russ Albert Medlin, Catalin Balaci, and Joseph Frank Abel – were charged by indictment in December 2019 in connection with the scheme.
From April 2014 through December 2019, the BitClub Network was a fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors into the scheme. Weeks operated as a large-scale promoter of the BitClub Network, and sold shares despite knowing that the BitClub Network and its operators did not file a registration statement with the U.S. Securities and Exchange Commission.
Weeks admitted taking money from investors in exchange for shares of the BitClub Network’s purported mining pools. He admitted that in order to promote shares, he created and posted videos to the internet and gave presentations and speeches about the BitClub Network throughout the United States and in numerous countries throughout the world.
Weeks instructed investors in the United States to use a VPN to hide their US-based IP addresses and evade detection and regulation by US law enforcement.
Weeks also admitted not filing tax returns and failing to report at least $10 million in income, including cryptocurrency income earned from his association with the BitClub Network, for the tax years 2015 through 2018.
The conspiracy charge carries a maximum penalty of five years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims. The tax charge carries a maximum penalty of five years in prison and a fine of $100,000.
Weeks’ sentencing is scheduled for March 17, 2021.