Estonia: Arrests for 575 million crypto fraud and money laundering

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Two Estonian citizens have been arrested in Tallinn for allegedly participating in a $575 million crypto-fraud and money laundering conspiracy, the US Department of Justice announced on Monday.

Sergei Potapenko and Ivan Turrigin, both 37, allegedly defrauded hundreds of thousands of victims through a multifaceted scheme, inducing them to enter into suspicious equipment rental contracts with the defendants’ cryptocurrency mining service HashFlare, the statement cited by Reuters said.

At the same time, the two defendants urged the victims to invest in a fiat currency bank called Polybius Bank, which was not actually a bank and never paid the promised dividends, the Justice Department said.

The victims paid more than $575 million to the companies of Potapenko and Turigin and then managed through shell companies to launder the proceeds of the fraud and buy real estate and luxury cars, the ministry said.

The money laundering conspiracy allegedly involved at least 75 properties, six luxury vehicles, cryptocurrency wallets and thousands of cryptocurrency mining machines, according to the department, which said the case was being investigated by the FBI.

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