Utahn Charged with Wire Fraud and Money Laundering in Alleged Cryptocurrency Mining Scheme

A Utah man has been charged with five counts of wire fraud and two counts of money laundering related to a cryptocurrency firm and a private investment firm he owns, according to the Department of Health. Justice. (Spenser Heaps, Deseret News)

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SALT LAKE CITY – A Utah man has been charged with five counts of wire fraud and two counts of money laundering related to a cryptocurrency firm and a private investment firm he owns, according to the Ministry of Justice.

James Wolfgramm, 43, of Spanish Fork, was named in a grand jury indictment in U.S. District Court in Utah on Thursday, along with two of his companies, Bitex LLC and Ohana Capital Financial Inc., according to the DOJ. Bitex is named in two counts of wire fraud, and Ohana Capital Financial is named in two counts of wire fraud and two counts of money laundering.

Wolfgramm and Bitex are accused of raising nearly $1.7 million from two would-be buyers of a powerful cryptocurrency mining machine called the “Bitex Blockbuster” — which doesn’t actually exist, the authorities said. investigators. Mining cryptocurrencies requires sophisticated computers that allow a user to “mine”, which is how new units of the cryptocurrency are made. Mining equipment also needs large amounts of electricity to operate.

The indictment alleges that Wolfgramm exhibited one of the machines at Bitex’s offices to allegedly demonstrate the real-time operations of the mining machine.

“In reality, the machine was fake, and the monitor displayed a pre-recorded loop that simply gave the appearance of mining activity,” a DOJ press release said.

Wolfgramm and Ohana Capital Financial are accused by investigators of raising millions of dollars from clients after they falsely claimed Ohana had a board of advisors and promised clients their funds were backed. In reality, the company is registered as a private lender and does not have accreditation as a full-fledged financial institution, according to the Department of Justice.

The company is accused of spending customers’ funds on unrelated business expenses without their knowledge, rather than holding them on deposit, DOJ officials said.

Finally, Wolfgramm was charged with fraudulently purchasing the Sports City complex from Draper for $15 million in 2021. According to federal prosecutors, Wolfgramm took over ownership and billing from customers without ever paying utilities or expenses and without making any of the payments promised to the seller. The DOJ says it has collected nearly $160,000 from clients.

Prosecutors say Wolfgramm gave the sellers of the property a $1 million check that bounced. Wolfgramm claimed to have paid more than $255,000 in property taxes, but prosecutors say those payments also failed because Wolfgramm knowingly used an account with insufficient funds.

Wolfgramm, Bitex and Ohana have faced similar allegations before. In January, Wolfgramm was charged with four counts of wire fraud while running his cryptocurrency business and mismanaging client funds.

The Justice Department said Wolfgramm also used the names Semisi Niu and James Vaka Niu.

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