A self-proclaimed cryptocurrency millionaire has been charged with multiple felonies for his alleged role in a scam that purported to sell a high-powered cryptomining machine called the "Bitex Blockbuster" that did not actually exist.
James Wolfgramm (also known as Semisi Niu or James Vaka Niu) of Spanish Fork, Utah, has been charged by a federal grand jury with wire fraud and money laundering. The charges are in relation to a scam that is said to have collected nearly US $1.7 million from two victims.
According to the indictment, Wolfgramm presented himself online as a cryptocurrency tycoon who had made his fortune in cryptocurrency.
It is alleged that Wolfgramm posted images on social media of expensive sports cars he claimed to own, suitcases full of cash, and screenshots of cryptocurrency wallets containing millions of dollars' worth of digital currency.
However, the indictment alleges, some of the images are thought to have been copied from the websites and social media accounts of others.
Furthermore, Wolfgramm and his company Bitex are alleged to have promoted a non-existent cryptomining machine they called the "Bitex Blockbuster".
According to the Department of Justice, victims were shown a purported "Bitex Blockbuster" at Bitex's office, which gave the impression of real-time cryptomining but was in fact showing a pre-recorded video loop.
Some of Wolfgramm's alleged victims turned to social media to share their stories of how they had been scammed.
Another of Wolfgrammm's companies - Ohana Capital Financial, Inc. (OCF) - is alleged to have offered financial services to those ineligible for traditional bank accounts, with the motto "Banking the Unbankable."
OCF customers are said to have received millions of dollars from clients who believed that their money would be kept on deposit, not knowing that their funds were being spent by Wolfgramm and OCF on "unrelated business expenses."
Wolfgramm faces two counts of money laundering and five counts of wire fraud.