More Trouble for East Hampton Man in Crypto Coin Scam
Federal authorities have criminally charged a former East Hampton man in an alleged scheme to defraud investors. The United States Attorney's office said he bilked investors in a digital currency company out of $6 million.
Randall Crater, 48, the founder of My Big Coin Pay Inc., which billed itself as a cryptocurrency and virtual payment services company based in Las Vegas, allegedly sold virtual currency that did not exist and pocketed the money, according to the U.S. Attorney's office. Mr. Crater's address is still listed in East Hampton, although it is not clear if he still lives here.
He was charged with four counts of wire fraud and three counts of money laundering.
According to the indictment, Mr. Crater and others created the fraudulent virtual currency My Big Coins or Coins and marketed them to investors over social media, the internet, email, and text messages, between 2014 and 2017, misrepresenting the nature and value of Coins. "Mr. Crater and his associates falsely claimed that Coins was a fully functioning cryptocurrency backed by valuable assets such as gold, oil, and other assets," a press release from the U.S. Attorney's office said. "They also falsely told investors that Coins could readily be exchanged for government-backed paper currency or other virtual currencies."
Coins were never backed by gold or other assets and were not readily transferable, the U.S. Attorney's office said.
In January 2018, the Commodity Futures Trading Commission brought commodity fraud charges against Mr. Crater and My Big Coin Inc. The commission also filed civil charges against the John Roche, the chief executive officer of My Big Coin, and two of Mr. Crater’s associates, Mark Gillespie and Michael Kruger.
The commission filed a federal lawsuit in U.S. District Court for the District of Massachusetts against Randall Crater, who, along with his wife, Erica Crater, was evicted from a Diane Drive residence in November of 2018, according to East Hampton Town Justice Court records. The businesses’ address was listed as 81 Newtown Lane in East Hampton, the location of a U.P.S. Store where Mr. Crater kept a mailbox.
Mr. Crater is facing a maximum sentence of 20 years in prison, with three years of supervised released, and a fine of $250,000, or twice the gross gain or loss, on the wire fraud charges. On the money laundering charges, he is facing a 10-year prison sentence, plus another $250,000 fine, or twice the value of the criminally derived property.
Mr. Crater was to appear Wednesday in U.S. District Court in the Middle District of Florida. A date for his appearance in the District of Massachusetts has not yet been scheduled.