Published on: August 4, 2022
A US Federal judge in California sentenced two Orange County men to prison for tricking victims into purchasing cryptocurrency that would give investors direct access to a “very” profitable trading program. This all ended up being a scam, of course.
Jeremy David McAlpine, 26, and Zachary Michael Matar, 29, persuaded more than 2,000 people to invest in their idea. They ultimately defrauded their victims out of $1.9 million.
“McAlpine and Matar were also primarily responsible for the development of Dropil’s digital asset trading program, an automated trading bot called “Dex,” which could be used exclusively with DROPs,” said the US Attorney’s Office in its press release on Monday.
“To induce investors to purchase DROPs, McAlpine and Matar made a series of false statements to investors in a ’White Paper‘ published on Dropil’s website and on its Twitter account, promoting the cryptocurrency’s supposed success,” the press release said. “Among other false statements, the White Paper asserted that trading with Dex would produce average annual returns of between 24% and 63% depending on the ’risk profile‘ selected by the investor.”
However, the scammers’ fraud didn’t stop there. They also produced fake Dex profitability reports for the Securities and Exchange Commission (SEC), saying that their business was meant to be operational and profitable.
McAlpine and Matar were sentenced to federal prison for securities fraud for 36 and 30 months, respectively.