By Horst Jicha, the founder of crypto firm USI Tech, has been arrested and charged by U.S. authorities for his involvement in an alleged $150 million international fraud scheme.
According to a recent release published by the U.S. Depoartment of Justice (DOJ), Jicha, a 64-year-old German national, is accused of operating USI Tech as a multilevel marketing scheme that falsely promised investors high returns on cryptocurrency investments.
The charges, which include securities fraud and conspiracies to commit securities fraud, wire fraud, and money laundering, were unsealed upon Jicha’s arrest while he was attempting to vacation in Miami, Florida, on Dec. 23, 2023.
CEO of Crypto Investment Platform Charged in Multi-Million Dollar International Fraud Scheme https://t.co/kE7bBcd49J (Announced with @NewYorkFBI)
— US Attorney EDNY (@EDNYnews) January 19, 2024
Jicha and USI Tech’s Fraud Scheme
Initially, Jicha and USI Tech aggressively marketed their platform in the U.S., falsely promising high returns on investments. USI Tech was presented as an easy and accessible way for average retail investors to participate in the crypto market. These promises included unrealistic returns of up to 140%, luring investors into the scheme.
The platform operated under the guise of a legitimate crypto investment opportunity but was, in reality, a multilevel marketing (MLM) scheme. This scheme was based on the principle of investors recruiting more investors beneath them, creating a pyramid-like structure. The emphasis was on recruitment rather than genuine investment, which is a hallmark of many fraudulent MLM operations.
Jicha proclaimed in 2017 that USI Tech represented the world’s inaugural automated Bitcoin trading platform. He claimed it simplified crypto investments for the average investor. Jicha attracted investment from U.S. investors through dynamic marketing campaigns conducted in locations including New York and Las Vegas, as stated in an indictment.
In the wake of regulatory scrutiny in the United States in 2018, Jicha abruptly shut down USI Tech’s operations in the country. Post-shutdown, a significant amount of crypto assets, specifically Bitcoin and Ether valued at about $150 million, was reportedly transferred to addresses controlled by Jicha.
U.S. Authorities’ Comments on Arrest
The DOJ included a contact email for the fraud victims in its press release and commented on the incident, saying, “Although the defendant did not return to the United States for half a decade, my Office and the FBI worked to ensure that when he did, he would be brought to justice.”
“Too often honest investors fall victim to schemes surrounding emerging financial opportunities,” said FBI Assistant Director-in-Charge Smith. “In reality the platform was just a facade, and when questions arose, Jicha stole millions of his investors’ money and fled the country.”
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