Key Takeaways
- DOJ alleged that he lured investors with misleading claims such as promising the victims returns on their investments as high as 60% within three months
- DOJ stated that a majority of the victims were allegedly Sfraga’s friends and neighbours, whose trust he betrayed to “swindle more than $1.3 million of their hard-earned savings.”
Thomas John Sfraga, known in the crypto world as “TJ Stone,” pleaded guilty to wire fraud charges in Brooklyn federal court on Thursday. Sfraga is accused of deceiving over a dozen victims into investing in fake ventures, including fraudulent cryptocurrency schemes.
According to a statement released by the U.S. Department of Justice (DOJ) on Friday, Sfraga promised investors up to 60% returns within three months for a fake cryptocurrency digital wallet. Instead of investing the funds as promised, Sfraga allegedly pocketed the money and used some to pay off earlier victims of his schemes. He now faces up to 20 years in prison and must pay $1.33 million in restitution.
“For years, Sfraga brazenly lied to friends, neighbors, and investors to swindle over $1.3 million of their hard-earned life savings,” stated U.S. attorney Breon Peace. The DOJ release noted that Sfraga’s experience is in real estate development, media relations, podcasting, and cryptocurrency, including hosting crypto events in New York.
Sfraga also falsely claimed ownership of “Vandelay Contracting Corp.” and “Build Strong Homes LLC.” This reference to “Vandelay Industries,” a fictional company from the TV show “Seinfeld,” was part of his effort to convince investors to fund nonexistent construction projects.
The DOJ’s May 17 statement detailed how Sfraga convinced a victim to invest in a fictitious cryptocurrency “virtual wallet,” promising high returns. “He promised the victims returns on their investments as high as 60% in three months,” the DOJ further explained. In reality, Sfraga was running a Ponzi scheme, using the investments of new participants to pay returns to earlier investors.
“Sfraga converted the monies to his own benefit, to pay expenses, and to pay earlier victims and business associates,” the DOJ explained.
Sfraga’s schemes were elaborate and well-planned. He used his position and reputation in the crypto community to lure unsuspecting investors. DOJ alleged that he lured investors with misleading claims such as promising the victims returns on their investments as high as 60% within three months
DOJ stated that a majority of the victims were allegedly Sfraga’s friends and neighbours, whose trust he betrayed to “swindle more than $1.3 million of their hard-earned savings.”
The latest development comes days after crypto King Aiden Pleterski was charged with money laundering and one count of fraud over 5,000 Canadian dollars ($3,666) by the Canadian authorities
Last month, Irin Dilkinshka was sentenced to serve four years in federal prison and forfeit over $100 million after pleading guilty for her role in the multibillion-dollar phoney OneCoin crypto scheme.
