A San Francisco man is heading to prison after a U.S. court sentenced him for conducting a multi-million dollar cryptocurrency fraud, according to a Department of Justice (DOJ) press release on Tuesday.
Jerry Ji Guo, 33, was handed a six-month sentence by U.S. District Judge Beth Labson Freeman and ordered to pay nearly $4.4 million in restitution after he had pleaded guilty to initial coin offering (ICO) fraud.
During the height of the ICO craze in 2018, Guo represented himself to clients as an ICO consultant, offering to perform marketing and consultancy services on behalf of cryptocurrency startups.
Instead of performing his duties as promised, Guo embezzled clients’ cash and cryptocurrency. He was indicted by a federal grand jury for the crime in November 2018.
The San Francisco man pleaded guilty to one count of wire fraud in August 2019. He had been charged on a further seven counts but the additional charges were dismissed. Guo was potentially on the hook for 20 years in prison if he was found guilty of all charges, the Daily Beast reported at the time.
In 2019, the U.S. government obtained a stipulated application for a preliminary order of forfeiture and also obtained warrants to seize Guo’s client’s funds. Per a final order of forfeiture, and with the assistance of Guo, the U.S. government is now in a position to restore stolen property to victims.
The current value of the stolen cash and cryptocurrency is estimated to be over $20 million, according to the DOJ.
“This case shows we can use criminal forfeiture to compensate fraud victims even when cryptocurrency is used in the fraud,” said U.S. Attorney David Anderson.
Guo has also been ordered by Judge Freeman to serve a three-year period of supervision by authorities upon his release from prison.