Crypto crimes have skyrocketed this week with two major cases of multi-million dollar bitcoin schemes.
One of the cases involved a Russian investigator who received a staggering $73 million bribe from a crime group he was tasked with investigating.
Another involved 86-year-old David Kagel who masterminded a $15 million Ponzi scheme with two accomplices.
All of these show the growing need for crypto education and monitoring with crimes at an all-time high.
This week, a former Russian investigator got sentenced to 16 long years in prison.
Marat Tambiyev stood accused of accepting a massive Bitcoin bribe in one of the largest bribery scandals in Russian history.
The convicted investigator was found guilty of accepting and spending a whopping $73 million in Bitcoin from an organized crime group he was supposed to be investigating.
Since when did crime gangs start offering such massive bribes? What did Tambiyev do with this money, and how serious has crypto-related bribery really become?
Let’s find out.
The interesting thing about Tambiyev’s case is that it far exceeds any known case of corruption in the country.
Interestingly, the money in question is five times larger than the previous record according to Reuters.
Sentenced for bribery
Kommersant, a Russian media outlet reported that the case is even more elaborate than a mere bribery.
Tambiyev allegedly masterminded the whole thing in which he moved more than half the crypto held by the crime group into his own wallets.
He then allowed the crime group to keep the remaining half, instead of having it all seized by the state.
Upon searching Tambiyev’s laptop, Russian prosecutors found several incriminating bits of evidence including the wallet keys in a file suspiciously labeled "Pension."
All of this has linked the investigator to the scheme and has played a huge role in his conviction.
Despite the damning evidence found on his laptop, Tambiyev claims that he is innocent.
Within the court, he claimed that his actions helped the state to recover a portion of the funds from the crime group.
In essence, he means that his involvement in the scheme wasn’t entirely corrupt. Instead, it was merely an “unethical” means to an end.
His defense did not hold water in court, however. Tambiyev has now been sentenced to 16 years behind bars.
He has announced plans to appeal the conviction, even though it remains unclear how strong his case will be.
Tambiyev was not the only one involved in this scandal though.
Reuters mentioned an alleged accomplice in the case, who received a nine-year prison sentence.
While more than a third of the stolen Bitcoin has been tracked and recovered, a large portion remains missing.
The exact location of more than half the missing funds is currently unknown.
In another crypto-related crime this week, a former California attorney was sentenced to five years of probation.
This attorney, 86-year-old David Kagel pleaded guilty to running a multimillion-dollar crypto Ponzi scheme.
Interestingly unlike Tambiyev, Kagel was able to avoid jail time because of his advanced age and failing health.
So how big was said Ponzi?
Kagel and two accomplices allegedly ran a scam crypto trading bot from December 2017 to June 2022.
The trio promised investors high returns with no risk.
Within the five years between 2017 and 2022, Kagel and the others reportedly collected at least $15 million from victims.
In further complication of the matter, Kagel used his position as a former attorney to draft letters on his law firm’s official letterhead.
These "official-looking" documents were then used to build trust with investors.
According to the US Department of Justice, the letters convinced victims that they were participating in a legitimate investment framework.
In one of the biggest signs of Ponzi schemes, Kagel promised investors that they would get their capital back.
Not only that, they were also promised returns as high as 100% within just 30 days.
The defendant even claimed he had 1,000 Bitcoins—worth approximately $11 million in January 2018 as insurance for the investments.
Notably, Kagel’s legal troubles extend far beyond this Ponzi scheme.
His law license was revoked by the California Supreme Court in 2023 after he failed to respond to disciplinary charges.
This came after two previous suspensions in 1997 and 2012.
The other two accomplices, David Saffron and Vincent Mazzotta have pleaded not guilty and are waiting for their trials in April next year.
These two cases only show the growing role of crypto in criminal activity.
While cryptos like Bitcoin are widely used because of privacy and independence, they are also being used for illicit purposes.
Some of these include sanction evasion, Ponzis and bribes as illustrated in the two cases.
This is also not the first time that Bitcoin has been used in high-profile corruption or bribery cases.
In a recent example from 2022, the U.S. DOJ revealed that Chinese intelligence officers attempted to bribe an FBI double agent with $61,000 worth of Bitcoin.
All of these point to the growing need for better monitoring and education among crypto users:
Especially in times like these when hacks and scams are at all-time highs.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.