New York Man Pleads Guilty to $2M Crypto Mining Fraud

A New York man pleaded guilty on Tuesday to defrauding more than a dozen victims out of a collective $2 million as part of a long-running crypto mining scam.

Chester “Chet” Stojanovich, 38, was arrested by the Federal Bureau of Investigation (FBI) in April and charged with one count of wire fraud.

From March 2019 to September 2021, Stojanovich posed as a dealer of crypto mining equipment, convincing customers to purchase mining machines through him and then taking payments to arrange hosting services at a facility in Goose Bay, Canada.

However, those facilities were a fiction and Stojanovich instead spent customers’ money on lavish purchases for himself, including private jet flights, limousine rides, parties, gifts for his wife and even paying off $80,000 of his personal credit card debt.

Stojanovich went to great lengths to convince his customers that his scheme was legitimate, purchasing approximately 75 miners from Amazon and Ebay and using them as props, sending pictures of himself with them to customers when they grew suspicious.

Stojanovich even took one customer, who demanded to see the hosting facility for himself, on a 31-hour road trip from New York to Goose Bay, only to drop him off at the Buffalo airport before they reached the Canadian border and inform him that he would be able to see the facility or receive any sort of refund.

In September 2019, Stojanovich’s communications with customers went dark, only for him to resurface two months later and inform customers that the purported owner of the fictional Goose Bay facility had gone bankrupt and run away with their equipment.

Six of Stojanovich’s victims filed suit against him in June 2020, alleging “civil RICO violations, breach of contract, fraud, conversion and unjust enrichment” but the threat of a lawsuit did not stop Stojanovich from trying his hand at a second fraudulent scheme.

Between August and September 2021, Stojanovich persuaded three mining brokers to purchase $200,000 worth of equipment through him. Though they paid for a combined 127 mining machines, the brokers only received three miners between them.

When they demanded refunds, Stojanovich wrote a series of bad checks before eventually refunding only $61,000, keeping the rest for himself. According to the complaint in the case, he spent the money on Apple products, hotels and restaurants, payments to his wife and more than $33,000 to an online casino.

Stojanovich faces up to 20 years in prison.

Read more: SEC Accuses 2 Firms of Crypto Pump-and-Dump Scheme