November 2, 2017
Count One: Provision of Material Support and Resources to a Designated Foreign Terrorist Organization
Count Two: Violence and Destruction of Motor Vehicles
Federal prosecutors allege that Maksim Zaslavskiy conducted initial coin offerings ("ICOs") through REcoin Group Foundation, LLC (REcoin) and DRC World, Inc., which was also known as Diamond Reserve Club (Diamond). Zaslavskiy allegedly marketed:
The Department of Justice charged Defendant Maksim Zaslavskiy with engaging in illegal unregistered securities offerings and fraudulent conduct and misstatements designed to deceive investors as part of two ICOs. Separately, the United States Securities and Exchange Commission (SEC) filed civil charges against him. As set forth in the DOJ Press Release:
- RECoin as "The First Ever Cryptocurrency Backed by Real Estatel" and
- Diamond as an "exclusive and tokenized membership pool" that was hedged by physical diamonds.
In connection with the two ICOs, Zaslavskiy, with the help of others working with him, allegedly sold virtual tokens or coins to investors under the pretense that the coins were backed by investments in real estate and diamonds, even though no such investments existed. Virtual currency, such as that promoted in these ICOs, is a digital representation of value that can be digitally traded but does not have legal tender status, and functions only by agreement with the community of users of that particular currency. Zaslavskiy and his cohorts promised substantial returns to investors even though neither company had any real operations. With respect to REcoin, Zaslavskiy advertised that the company had a "team of lawyers, professionals, brokers and accountants" who would invest the proceeds from the REcoin ICO into real estate when in fact no such employees had ever been hired or even consulted, and no real estate investments were made. Similarly, Zaslavskiy told prospective investors in Diamond that their investment in Diamond tokens was "hedged by physical diamonds," even though Diamond had not actually purchased any diamonds or engaged in any business operations.
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Federal prosecutors alleged that between September 2008 and January 2011, Ramin Rad "Ray" Yeganeh and other bidders conspired not to bid against one another on selected properties offered at real estate foreclosure auctions in Alameda County. The the proceeds of this foreclosure auctions pay off the mortgage/debt attached to the property and any remaining sum is paid to the homeowner.
Yeganeh and his co-conspirators allegedly designated a winning bidder for a selected property and subsequently conducted a private round at which the property was awarded to a conspirator and payoffs were determined for those who had not competed during the public auction.
On June 14, 2017, Yeganeh pleaded guilty to one count of bid rigging and was subsequently sentenced to 12 months in prison, three years of supervised release, and ordered to pay $149,733 in restitution.