A programmer of Romanian origin named Silviu Balaci was sentenced to five years behind bars and a fine amounting to $250,000 for running the BitClub Network mining scam.
The scheme was operating from 2014 to 2019 and allegedly harvested around $722 million, as the U.S. Attorney Craig Carpenito claimed. After the scheme was busted, Balaci was arrested along with his fellows Matthew Brent Goettsche, Jobadiah Sinclair Weeks, and Joseph Frank Abel. After all investigative and court procedures were accomplished, he got his sentence on July 9.
Balaci was responsible for technical operation of the scam. During interrogations, he revealed that he was adjusting numbers to pose it as if BitClub Network was making a lot of money. Besides, he was perfectly fine with realizing they were frauding people. The correspondence with Goettsche that was exposed during the investigation revealed that Balaci frankly called their investors “dumb”, stating they were “building this whole model on the backs of idiots.”
Another participant of the fraudulent company, Russ Albert Medlin, was wanted by the FBI until June 2020. Back then, he was arrested by the police of Jakarta for sex crimes and child abuse, as CoinIdol, a world blockchain news outlet, reported. So, besides being involved in BitClub Network, Medlin will face charges for sex abuse, ad he had a long track record of pedophily in the USA.
The police of Jakarta caught him red-handed with girls aged 15, 17 and 18. He also possessed cash amounting to $20K, which he allegedly used to pay for sex with these girls. Besides being exposed in sex abuse of the underage, Medlin was charged for making child porn pictures and video as the police found lots of materials as evidence.
All this has already created a highly negative image for all the participants of BitClub Network, indisposing for any mitigations of punishment by the court. As Silviu Balaci ended up with the maximum term in prison, all other participants will probably also get the strictest possible sentence.