Kevin Helms
A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of economics and cryptography.
US Judge Orders Bitcoin Ponzi Operator Jailed for Ignoring Court Order to Pay SEC $40 Million – Regulation Bitcoin News
A district judge has ordered a bitcoin Ponzi operator to be arrested and jailed after he ignored several court orders and failed to pay the US Securities and Exchange Commission (SEC) $40 million. He pleaded guilty to securities fraud in 2015.
Bitcoin Ponzi operator faces jail after failing to pay SEC
Judge Amos L. Mazzant of the US District Court for the Eastern District of Texas said earlier this week that a bitcoin Ponzi operator will be arrested and jailed for civil contempt unless he immediately provides overdue documents and payments, Bloomberg reported.
Trendon Shavers, a resident of McKinney, Texas, owes the US Securities and Exchange Commission (SEC) more than $40 million after pleading guilty in September 2015 to one count of securities fraud. However, he has repeatedly ignored court orders, Judge Mazzant said, adding:
Shavers’ blatant disregard for the court’s orders on several occasions leads to only one conclusion: Shavers will only comply with the court’s orders if he is incarcerated.
The SEC charged Shavers and his company, Bitcoin Savings and Trust (BTCST), in July 2013 with running a bitcoin Ponzi scheme. According to authorities, he defrauded investors out of at least 764,000 BTC.
The SEC issued a ruling against him in September 2014. The regulator said at the time:
The court’s judgment requires Shavers and BTCST to pay more than $40 million in disgorgement and prejudgment interest, and orders each defendant to pay a civil penalty of $150,000.
Judge Mazzant’s contempt order focuses on the SEC’s efforts to enforce the $40.4 million civil judgment, the publication reported.
The SEC asked Shavers for certain financial documents to determine his ability to pay the settlement. Shavers testified that he had not paid and that he earned about $4,000 per month. The court ordered him to produce the documents and make six $400 payments, but the documents and two of the payments never materialized, prompting several SEC motions and court orders.
The district judge also noted that Shavers did not appear for a hearing. He reiterated that other than imprisonment, he saw “no other way to compel Shavers to comply” with court orders.
Do you think shavers should go to jail for not paying the SEC after pleading guilty? Let us know in the comments section below.
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