New York Man Charged in $4.5 Million Cryptocurrency Scheme

A New York man was arrested on Thursday on charges of wire fraud in an alleged multi-million-dollar cryptocurrency scheme. 

According to the release published by the U.S. Attorney’s Office of the Northern District of California, Douglas Jae Woo Kim has been charged in a criminal complaint in connection to a scheme to defraud investors of $4.5 million in crypto-assets. 

The complaint claims that Kim, 27, of New York, New York, represented to friends and acquaintances that he was a cryptocurrency trader and requested loans for business purposes in order to conduct trades. The filing outlined how Kim used bitcoin and ethereum to finance transactions for the scheme, and transferred victim funds on multiple occasions to online gambling sites without their knowledge. 

The complaint claims that Kim contacted one such victim in October 2017 over a short-term loan for what he described as a “fairly modest operation” involving cryptocurrency. Kim told the victim he had already acquired $300k – $400k from similar operations and said the scheme “isn’t very risky to me.” After receiving the funds from the victim, Kim went on to transfer about half of the bitcoin to a sportsbook and casino located outside of the United States. 

According to the release, Kim convinced his victims to provide him over $4.5 million in crypto-assets, with nearly all of the funds being transferred to gambling sites. The defendant has been charged with one count of wire fraud and faces up to 20 years in prison if convicted. 

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