Bitcoin Ponzi operator jailed for ignoring court order to pay SEC $40 million
October 28, 2022 9:44 AM
A district judge has issued an arrest warrant for a bitcoin Ponzi operator who has defied several orders to pay $40 million to the U.S. Securities and Exchange Commission (SEC). In 2015, he entered a guilty plea for securities fraud.
According to Bloomberg, U.S. District Judge Amos L. Mazzant of the Eastern District of Texas warned a bitcoin Ponzi operator this week that he would be arrested and jailed for civil contempt if he did not quickly submit outstanding documentation and payments.
McKinney, Texas native Trendon Shavers owes the United States Securities and Exchange Commission (SEC) about $40 million after pleading guilty to securities fraud in September 2015. But he has consistently ignored court orders, Judge Mazzant remarked, adding:
"As Shavers has repeatedly disregarded court orders, we can only conclude that he will obey them once he is behind bars."
In July of 2013, Shavers and his organization, Bitcoin Savings and Trust (BTCST), were accused by the SEC of operating a bitcoin Ponzi scam. Authorities estimate that he stole at least 764,000 BTC from investors.
In September of 2014, the SEC was able to secure a decision against him. According to the regulator at the time.
"The court's ruling mandates that Shavers and BTCST pay a total of almost $40 million in disgorgement and prejudgment interest, plus a $150,000 civil penalty for each defendant."
The magazine stated that the SEC's efforts to enforce the $40.4 million civil judgment were the primary focus of Judge Mazzant's contempt order.
The SEC requested specific financial information from Shavers to ascertain whether or not he would be able to pay the disgorgement. Mr. Shavers said that he was making roughly $4,000 per month and had made no payments. SEC filed motions and the court ordered him to comply, but he failed to turn over the paperwork and pay out two of the six $400 installments.
In addition, Shavers was absent for a hearing, which the district judge mentioned. He stated once again that he saw "no other means to persuade Shavers to comply" with court instructions besides incarceration.