A Lake Mary man was sentenced this week to 100 months in prison and three years of supervised release related to fraudulent marketing and sale of virtual currency.
Randall Crater is the founder of My Big Coin, a cryptocurrency and virtual payments service company headquartered in Las Vegas.
In addition to fraudulent marketing and sales charges, Randall, as head of the company, was also charged with operating an unlicensed virtual currency exchange.
Randall was sentenced by U.S. District Court Judge Denise J. Casper. He was also ordered to pay a nearly $7.7 million forfeiture and restitution in an amount to be determined at a later date.
“For nearly four years, Mr. Crater perpetrated a brazen fraud scheme that preyed on investors and customers who put their faith in him and his fake business, resulting in victim losses of over $7.5 million,” U.S. Attorney Rachael S. Rollins said.
“He saw the growing crypto marketplace as an opportunity to create the illusion of My Big Coin as a legitimate service from which investors would yield a profit. His lies and deception inflicted real trauma, pain and hardship on the lives of 55 individual victims and their families who funneled their money into bank accounts Mr. Crater controlled and used to finance his extravagant lifestyle.”
She said she hopes his sentence “sends a strong message to fraudsters” that they will “be found and brought to justice.”
Crater was convicted of the crimes by a federal jury last July. Those charges included four counts of wire fraud, three counts of unlawful monetary transactions and one count of operating an unlicensed money transmitting business.
“Spreading outright lies, Randall Crater defrauded dozens of victims out of more than $7.5 million, convincing them their cryptocurrency investments were backed by gold when in reality their hard-earned money went to funding his lavish lifestyle,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division.
“The harm done here was significant — delayed retirement, tuition money lost, lives turned upside down — all because of one man’s greed. Today’s lengthy sentence doesn’t right those wrongs, but it does ensure Mr. Crater won’t be victimizing anyone else.”
Founded in 2013, My Big Coin claimed to offer virtual payment services through a fraudulent digital currency (“coins”), which Crater marketed to investors between 2014 and 2017 using misrepresentations. Crater, along with agents he paid to promote the scheme, claimed the coins were a fully functioning cryptocurrency backed by gold and that My Big Coin had a partnership with MasterCard.
Crater also operated the My Big Coin Exchange, which was advertised as a fully functioning currency exchange where coins could be transferred for government-backed fiat currency or other virtual currencies. Crater and others made these misrepresentations through social media, the internet, email and text messages.
Contrary to the company’s claims, the coins were not backed by gold or other valuable assets, the company did not have a partnership with MasterCard and coins were not readily transferable on the My Big Coin Exchange. Over the course of the scheme, Crater obtained more than $7.5 million from investors and customers, which he used to buy a house, cars, and more than $1 million in antiques, artwork and jewelry.
“The excitement of being part of a new market in cryptocurrency can be very enticing to those who want to be in at the forefront; but in this case they found their investment was nothing more than an investment in Mr. Crater’s lavish lifestyle,” said Eric Shen, Inspector in Charge of the U.S. Postal Inspection Service’s Criminal Investigations Group.
“Postal Inspectors remind consumers to thoroughly investigate all offers and don’t rely on what they’re told, even if they believe there is protection in their investments and deposits through the name recognition of an alleged renowned partner. In this case it was all lies, and now Mr. Crater will be held accountable for his illegal activities.”
The Commodity Futures Trading Commission (CFTC) first alleged My Big Coin was a fraud in January 2018. The CFTC also filed civil charges against Crater and several of his associates for their involvement in the scheme. The civil action was stayed on March 8, 2019, pending resolution of the criminal case.