The U.S. Department of Justice [DOJ] plans to dismiss its criminal case against Matthew Goettsche, the alleged founder of the BitClub Network cryptocurrency investment scheme, Bloomberg Law reported. This could potentially bring one of the longest-running crypto fraud prosecutions to an end.
The reported move comes nearly seven years after federal prosecutors accused Goettsche and several co-defendants of operating a global cryptocurrency mining scheme that allegedly defrauded investors of at least $722 million.
While the DOJ is reportedly preparing to dismiss the case with prejudice, no dismissal motion had appeared on the public court docket at the time of writing.
Bloomberg: DOJ preparing to dismiss prosecution
Bloomberg Law reported that the DOJ has instructed prosecutors in New Jersey to dismiss the charges against Goettsche with prejudice. This means the case could not be refiled if the court approves the request.
According to the report, the parties are still finalizing the terms before notifying the court.
The report also said Goettsche’s lawyers informed the court on July 8 that they had reached “an agreement in principle to resolve the pending charges.” A DOJ spokesperson told Bloomberg that the department routinely reviews long-running prosecutions and noted that the case has been pending for seven years.
The spokesperson also said the government is recovering a substantial amount for victims and denied that lobbying efforts influenced the decision.
BitClub became one of crypto’s biggest alleged Ponzi schemes
Federal prosecutors unsealed the BitClub Network indictment in December 2019. It is alleged that Goettsche created and operated a fraudulent cryptocurrency mining investment scheme that collected at least $722 million from investors worldwide.
Prosecutors alleged that the defendants manipulated the mining earnings they displayed to investors while using new participant funds to sustain the operation.
The indictment also included internal messages in which prosecutors alleged members of the scheme discussed inflating mining figures.
They also referred to prospective investors using derogatory terms, arguing that the communications demonstrated knowledge that the business was operating fraudulently.
Case against other defendants has continued
The reported dismissal would not erase the wider BitClub prosecution.
Several co-defendants have already pleaded guilty to offenses connected to the scheme. In 2022, Gordon Brad Beckstead entered into a plea agreement with the DOJ.
He agreed to plead guilty to conspiracy to commit money laundering and tax-related offenses arising from his role in laundering BitClub proceeds and assisting with false tax returns.
The reported move, therefore, appears limited to Goettsche’s prosecution rather than signaling the end of all enforcement actions stemming from the BitClub investigation.
Final Summary
- Bloomberg Law reports that the DOJ plans to dismiss its criminal case against alleged BitClub founder Matthew Goettsche with prejudice.
- The BitClub Network case alleged a $722 million cryptocurrency mining fraud. At the same time, prosecutions against several co-defendants have already resulted in guilty pleas.
