Crypto Ponzi Architect Hired Trump-Tied Lawyers β Now The DOJ Is Dropping His $700 Million Fraud Case
The Justice Department (DOJ) is moving to drop criminal charges against the alleged architect of a $722 million cryptocurrency fraud scheme, according to Bloomberg, ending a prosecution that had been building for nearly seven years and was weeks away from going to trial.Β
The decision to dismiss the case with prejudice β meaning it cannot be refiled β was made by the deputy attorney general’s office in Washington, which instructed the New Jersey US attorney’s office to stand down, though the final terms are still being worked out before the court is formally notified.
The Trump Connection That Allegedly Ended The ProsecutionΒ
The defendant is Matthew Goettsche, who created and ran BitClub Network, a crypto mining operation that prosecutors described as a global fraud spanning 2014 to 2019. The scheme worked by pooling investor money supposedly to purchase mining hardware and computing capacity, then distributing profits generated from Bitcoin (BTC) mining.Β
In reality, prosecutors alleged, the operation reported fabricated profits and systematically defrauded its investors. Internal communications cited in the indictment showed Goettsche referring to potential crypto investors as “dumb” and “sheep,” and in a September 2017 email he told a co-conspirator that BitClub Network would let them “retire RAF β rich as f*ck.”Β
The crypto network also rewarded members for recruiting new investors, a structure prosecutors said resembled a pyramid scheme. Three of Goettsche’s co-defendants pleaded guilty after the indictment was obtained during Trump’s first term. Goettsche’s case dragged on for years due to extended plea negotiations and the review of two million electronic records, the report said.Β
Settlement talks broke down in December, and in February, prosecutors β including then-Deputy Attorney General Todd Blanche β submitted a letter to the court stating a jury trial was necessary. A trial date of October had been set. That changed after Goettsche assembled a legal team reportedly with ties to the Trump administration and “lobbied the Justice Department for relief.”Β
His lawyers included Bradford Cohen, a Florida attorney who appeared as a contestant on Trump’s reality show The Apprentice and has been a vocal supporter of the president, and Brett Tolman, a conservative criminal justice advocate who has helped multiple clients obtain Trump pardons.Β
DOJ Denies Any Outside InfluenceΒ
After further lobbying earlier this year, senior DOJ official Aakash Singh β an associate deputy attorney general known for enforcing Trump’s policy priorities β convened a meeting in Washington between defense lawyers and prosecutors.Β
Per the report, that session led to the deputy attorney general’s office directing the new New Jersey US attorney, Robert Frazer, to pull back from the criminal charges against the crypto founder while still pursuing recovery of a portion of investor losses.
The Justice Department pushed back on the suggestion that outside pressure had driven the decision behind the crypto case. “DOJ routinely evaluates cases that have been pending for more than a few years,” department spokesperson Emily Covington told Bloomberg in a statement:Β
This particular case had been pending for 7 years now, and the government is recovering a substantial amount owed to investors. DOJ’s decision here had nothing to do with any alleged pressure by Goettsche’s attorneys.
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