Satish Kumbhani has been indicted by a Grand Jury in San Diego.

Kumbhani, an Indian national, is the founder of the notorious BitConnect Ponzi scheme.

As per a DOJ press-release issued earlier today;

As alleged in the indictment, however, BitConnect operated as a Ponzi scheme by paying earlier BitConnect investors with money from later investors.

In total, Kumbhani and his co-conspirators obtained approximately $2.4 billion from investors.

The indictment further alleges that, after operating for approximately one year, Kumbhani abruptly shut down the Lending Program.

BehindMLM documented BitConnect’s collapse in January 2017.

Kumbhani then directed his network of promoters to fraudulently manipulate and prop up the price of BitConnect’s digital currency, a commodity known as BitConnect Coin (BCC), to create the false appearance of legitimate market demand for BCC.

Kumbhani (right) working to evade US financial regulations, is also part of the charges leveled against him.

At time of publication Kumbhani’s indictment isn’t publicly available. I’m expecting the case will show up on Pacer early next week.

Kumbhani is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting business, and conspiracy to commit international money laundering.

If convicted of all counts, he faces a maximum total penalty of 70 years in prison.

Conspiracy to Commit Wire Fraud—Title 18, U.S.C., Section 1349

Maximum penalty: Twenty years in prison, forfeiture, restitution, and $250,000 fine

Wire Fraud—Title 18, U.S.C., Section 1343

Maximum penalty: Twenty years in prison, forfeiture, restitution, and $250,000 fine

Conspiracy—Title 18, U.S.C., Section 371

Maximum penalty: Five years in prison, and $250,000 fine

Operation of Unlicensed Money Transmitting Business—Title 18, U.S.C., Section 1960

Maximum penalty: Five years in prison, forfeiture, and $250,000 fine

Money Laundering Conspiracy—Title 18, U.S.C., Section 1956(h)

Maximum penalty: Twenty years in prison, forfeiture, and $250,000 fine

I’ll follow up with an article detailing specifics of the Kumbhani’s indictment when that happens.

In the meantime Kumbhani’s status is unclear. The DOJ’s press-release states he’s “at large”.

In January an SEC filing revealed Kumbhani fled India a few years ago.

In October 2021, the Commission staff learned that Kumbhani had likely relocated from India to an unknown address in a different country.

The Commission has sought assistance from that country’s financial regulatory authorities in locating Kumbhani, so that the Commission may serve him, and Bitconnect through him.

The Commission has not yet received any such address and is unable to estimate how long it will take to obtain one.

BehindMLM learned Kumbhani relocated to Dubai in 2018.

Due to limited extradition treaties and non-cooperation with foreign authorities, the UAE has created a safe haven for scammers.

BehindMLM recognizes Dubai as the MLM scam capital of the world.

“Today’s indictment reiterates the FBI’s commitment to identifying and addressing bad actors defrauding investors and sullying the ability of legitimate entrepreneurs to innovate within the emergent cryptocurrency space,” said Special Agent in Charge Eric B. Smith of the FBI’s Cleveland Field Office.

“Dressing up a tried-and-true fraud scheme with a new twist and basing it overseas will not deter the resolve and dedication of the FBI to meticulously investigate and bring such fraudsters to justice.”

The SEC filed a civil fraud lawsuit against Kumbhani last year. That case is still playing out.

Whether a $2 billion MLM Ponzi scheme is enough to make Dubai’s authorities take fraud seriously remains to be seen.