Estonia Renews U.S. Extradition of Crypto Businessmen Accused of $575 Million Ponzi Scheme: Report
The Estonian government has decided to renew the United States extradition of two alleged fraudsters accused of running a $575 million scheme, Estonian Public Broadcasting reports.
“Justified in accordance with the rule of law”
The extradition’s approval reverses an earlier decision made by the Tallinn Circuit Court in November to block the extradition, citing “procedural irregularities” and “conditions of detention in the United States.”
However, Estonian Minister of Justice Kent Lalle stated the court “verified” that the conditions of the accused perpetrators’ upcoming detention facility in the U.S. were “humane” and “lawful.”
“The government concluded that the extradition of the citizens to the U.S. is justified in accordance with the rule of law and does not disproportionately affect the rights of the citizens,” Lalle said.
A half-a-billion-dollar global crypto scheme
News of the extradition comes just over a year after Estonian citizens Sergei Potapenko and Ivan Turõgin were arrested for orchestrating the more than half-billion dollar fraud. U.S. prosecutors allege the duo lured victims to invest in crypto mining firm, Hashflare, and digital asset bank, Polybius Bank, before laundering funds into shell companies in order to “purchase real estate and luxury cars.”
“The size and scope of the alleged scheme is truly astounding,” U.S. Attorney Nick Brown of the Western District of Washington stated in a November 2022 press release.
“They lured investors with false representations and then paid early investors off with money from those who invested later,” Brown continued.
“They tried to hide their ill-gotten gain in Estonian properties, luxury cars, bank accounts, and virtual currency wallets around the world.”
Facing a lengthy prison sentence following extradition
U.S. Attorneys allege that Hashflare itself was a sham, performing “Bitcoin mining at a rate of less than one percent of the computing power it purported to have.”
Moreover, it was found that Polybius Bank was never established, as Potapenko and Turõgin pocketed the $25 million they had raised for its creation.
“The indictment alleges that the money laundering conspiracy involved at least 75 real properties, six luxury vehicles, cryptocurrency wallets, and thousands of cryptocurrency mining machines,” reads the November 2022 press release.
Potapenko and Turõgin are charged with conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, and 16 counts of wire fraud.
“Each of these crimes is punishable by up to 20 years in prison,” continues the
U.S. Attorney’s press release.It is currently unclear what detention facility Potapenko and Turõgin will be extradited to.
