A U.S. federal judge in Texas ordered Bitcoin Savings and Trust and its owner to pay a $40.7 million after the U.S. Securities and Exchange Commission proved that the bitcoin company was a Ponzi scheme. The judge stated that the company was "as a sham and a Ponzi scheme" that misled investors from February 2011 to August 2012. Firm owner, Trendon Shavers, promised investors up to 7 percent in weekly interest to be paid based on his ability to trade the bitcoin currency. But the judge found that Shavers used new investors’ money pay "returns" to earlier investors. The judge also found that Shavers used some investor funds on rent, food, shopping, and casino trips.
Investors lost a total of approximately $150 million. Despite the widespread news and warnings about Ponzi schemes after the Bernard Madoff scandal, investors continue to be enticed by promises of outrageous investment returns and continue to fall prey to Ponzi scheme investment frauds. Our investment fraud lawyers have helped defrauded investors recover millions of dollars of investment losses.