The United States justice system has sent Chet Stojanovich to prison for three years for defrauding more than a dozen cryptocurrency mining equipment buyers of over $2 million. Announced on Thursday, the sentencing was set after Stojanovich’s guilty plea last November for one count of wire fraud.

American Man Gets 3 Years in Jail

He has been penalised with three years of supervised release sentencing. He was also ordered to forfeit more than $2.15 million and provide restitution of over $2.1 million for the victims.

He has been convicted for fraudulent representations to his customers that he would provide them with specialized cryptocurrency-mining computers and miner-hosting services. He claimed to provide victims with “lucrative hash power” for cryptocurrency mining.

However, Stojanovich did not provide victims with any miner or miner-hosting services and misappropriated their collected money.

“Chet Stojanovich took advantage of a flashy new trend in the financial sector to swindle his victims into sending him more than $2 million in exchange for cryptocurrency-related technology and equipment that these victims never received,” said US Attorney Damian Williams.

A Massive Fraud around Crypto Miner Sale

According to the court documents, Stojanovich pulled off the fraud with several entities, including Chet Mining, that operated from at least 2019 until his arrest in April 2022. He started the fraudulent scheme of selling crypto miners and miner-hosting services around March 2019. He falsely claimed that he would or had purchased miners on behalf of customers and would provide them with miner-hosting services.

In reality, he did not provide any of the promised services and resorted to deceptive practices to create the illusion that he had acquired the miners. He even misappropriated customer funds for unrelated and personal expenditures.

Stojanovich’s fraudulent operations were exposed when six victims filed a civil lawsuit against him. To conceal the fraud, Stojanovich even lied under oath at a deposition and also to a presiding district judge about the existence and location of electronic evidence materials.

“This case serves as another reminder that even new financial frontiers are fraught with old-fashioned fraud, but our career prosecutors and law enforcement partners are ever as prepared to root out these schemes,” US Attorney Williams added.