PORTLAND, Ore. (KOIN) – A federal grand jury in Oregon returned an indictment on Wednesday charging four founders of a decentralized finance cryptocurrency platform with taking approximately $340 million from victims around the world.
Officials identified the founders of the crypto investment platform Forsage as Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev and Sergey Maslakov, who are all Russian nationals.
The Oregon Department of Justice alleges the four promoted Forsage as a “decentralized matrix project” based on “smart contracts,” which are self-executing contracts on the blockchain, and further promoted the company on social media as a legitimate business opportunity.
“Together with our partners, the department is committed to holding accountable fraudsters who cheat investors, including in the emerging DeFi space,” said Assistant Attorney General Kenneth A. Polite, Jr. “Today’s indictment showcases the department’s ability to use all available investigative tools, including blockchain analysis, to uncover sophisticated frauds involving cryptocurrency and digital assets.”
The defendants allegedly used the smart contracts that “systemized their combined Ponzi-pyramid scheme” on the Ethereum, Binance Smart Chain and Tron blockchains, the Oregon DOJ said.
Officials said computer code on Forsage’s smart contracts would automatically divert investor funds to crypto accounts under the founder’s control.
“Today’s indictment is the result of a rigorous investigation that spent months piecing together the systematic theft of hundreds of millions of dollars,” said U.S. Attorney Natalie Wight for the District of Oregon. “Bringing charges against foreign actors who used new technology to commit fraud in an emerging financial market is a complicated endeavor only possible with the full and complete coordination of multiple law enforcement agencies. It is a privilege to work alongside the agents involved in these complex cases.”
Blockchain analytics found 80% of Forsage investors received fewer ETH back than they had invested in the blockchain and over half of investors did not receive a single payout, the Oregon DOJ said.
“These individuals are alleged to have used trendy technology and opaque language to swindle investors out of their hard-earned cash,” said Special Agent in Charge Ivan J. Arvelo of Homeland Security Investigations (HSI) New York. “But, as the indictment alleges, all they were doing was running a classic Ponzi scheme.”
Okhotnikov, Oblamska, Sergeev and Maslakov were charged with conspiracy to commit wire fraud and face a maximum penalty of 20 years in prison.