- Robert Dunlap was sentenced to 23 years in prison for a cryptocurrency fraud scheme that stole $20 million from investors.
- He falsely claimed the Meta-1 Coin was backed by $44 billion in Gold and a $1 billion art collection featuring works by Picasso and van Gogh.
- The U.S. Securities and Exchange Commission (SEC) previously ordered an asset freeze against the project in March 2020.
A Texas man received a 23-year prison sentence this week for masterminding a cryptocurrency scam that defrauded 1,000 investors of $20 million. U.S. District Judge LaShonda Hunt imposed the sentence in Illinois and ordered restitution for the victims, according to federal prosecutors. Robert Dunlap, who served as a trustee for the Meta-1 Coin project, was found guilty in November on two counts of mail fraud.
The scheme involved selling a fictional token with wildly false promises of backing. Dunlap and his co-conspirators claimed Meta-1 Coin was supported by a $1 billion art collection and $44 billion in gold reserves. However, these assets were entirely fabricated to lure unsuspecting investors.
Prosecutors emphasized the severity of the punishment as a deterrent. Assistant U.S. attorneys stated Dunlap was “unrepentant” and his lies grew “over the years.” Consequently, they argued such a significant sentence was necessary to warn other potential fraudsters.
The fraudulent operation used sophisticated methods to create a facade of legitimacy. Authorities say automated trading bots artificially inflated the coin’s price and trading volume on Dunlap’s proprietary exchange. Meanwhile, investor funds were diverted for personal luxuries like a Ferrari instead of developing the project.
Regulatory action against the scheme began years before the criminal conviction. The SEC ordered an asset freeze in March 2020, targeting Dunlap and accomplices including a former state senator. This case highlights the ongoing crackdown by U.S. authorities on cryptocurrency fraud.
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