Bitcoin Fraudster Fined $1.9 Million By New York District Court

A U.S District Court Judge in New York judge has ordered Dillon Michael Dean of Colorado to pay a $1.9 million fine for running a fraudulent scheme through which he and his company defrauded customers.

Story continues below

The judicial ruling was delivered in a case that was filed earlier this year by the Commodity Futures Trading Commission (CFTC), accusing Dean of running a scam through his company called The Entrepreneurs Headquarters Limited (TEH). According to the CFTC’s court filing, Dean and his company which is registered in the UK managed to solicit Bitcoins (BTC-USD) from their customers through misrepresented information. They told the customers that the funds would be put in a pool that would allow the firm to invest in various investment opportunities such as binary options.

According to the filing, TEH had not been registered as a Commodity Pool Operator (CPO) according to the CFTC’s requirements and Dean had also failed to register as an associated person of a CPO. The Judge presiding over the case found that the defendants had been running a fraudulent scheme since April 2017 and had managed to solicit Bitcoin worth at least $499,264.04 from more than 127 individuals.

TEH promised the investors that the funds would be converted to fiat currencies and then put in a pool that would spread its investments which would be spread out to various commodity interests including binary options. Dean and his associates also lied to their customers that they had a lot of trading experience and that they would deliver high returns.

Using social media to reach a wide audience

The company failed to convert the Bitcoins to fiat currency as had been promised and instead ended up embezzling the funds. As a result, investors ended up losing their Bitcoins which Dean had managed to solicit through aggressive marketing on social platforms including Facebook and YouTube.

Dean’s Facebook posts and YouTube videos were used to build the case against him, revealing that he had made false claims of successful options trades that earned him high returns. Fortunately for the investors, the court has ordered Dean and TEH to repay the $432,184.79 that they defrauded and also a $1,497,792.12 fine for running a fraudulent program.

An ad to help with our costs