The Commodity Futures Trading Commission (CFTC) has filed and simultaneously settled charges regarding a multi-million dollar Bitcoin fraud, according to a release.
Randy Craig Levine, formerly of Coral Gables, Florida, and Philip Reichenthal of Homestead, Florida, have been charged with engaging in a deceptive and fraudulent scheme that saw investors provide more than $5 million to Reichenthal to buy Bitcoin from Levine, claims the CFTC. Apparently, after receiving the investors’ funds, Reichenthal and Levine failed to deliver the Bitcoin as promised and failed to return the investors’ funds.
The orders require full restitution for the victims and permanent bans on trading for Levine and Reichenthal.
In a related criminal case, the U.S. District Court for the Southern District of New York accepted a guilty plea from Reichenthal on February 11, 2022, and Levine on November 9, 2022.
The court sentenced Levine to 70 months in prison and Reichenthal to time served and forfeiture commensurate with the amount of restitution in the CFTC’s orders.
CFTC Director of Enforcement Ian McGinley said they are devoting substantial attention to detering fraud in the digital asset sector.
“The conduct in this case is particularly reprehensible because one of the fraudsters was an attorney who should have known better but instead took advantage of his title. We seek to hold accountable all fraudsters in our markets, but especially those who abuse their positions of trust.”
The CFTC added a note that requiring repayment of funds to victims does not guarantee any funds will be recovered.