Judge hands former Seattle rugby player 30-month sentence over $900K crypto Ponzi

A former semi-professional rugby player from Seattle has been sentenced to 30 months in federal prison for orchestrating a fraudulent crypto mining scheme that milked over $900,000 from investors.

37-year-old Shane Donovan Moore appeared Wednesday before US District Judge Tana Lin in Seattle to face sentencing for wire fraud. Moore had previously pleaded guilty to running a Ponzi operation through his company, Quantum Donovan LLC.

Acting US Attorney Teal Luthy Miller announced the sentence in a statement released after the hearing.

Fraud behind crypto reward promises

According to federal prosecutors, Moore launched Quantum Donovan LLC in Washington state under the pretense of buying and operating crypto mining equipment. Investors were told that their funds would be used to purchase high-powered computers capable of generating digital currency around the clock. 

Moore promised them daily returns of 1% on investments and even signed services agreements guaranteeing $130 per day for each mining machine over an eight-month period.

In July 2021, one such proposal claimed that a $20,000 investment would yield $200 daily, totaling $48,000 by the end of the term. Payments were to be made in Bitcoin and sent directly to investors’ digital wallets. Yet, prosecutors say those mining machines never existed.

Lavish spending after falsified returns

Per the FBI’s findings and testimonies in court, Moore transferred the funds meant to buy equipment into his personal bank accounts. He used the funds to support a lavish lifestyle that included shopping for electronics, clothing, luggage, and paying deposits on a luxury apartment.

To prevent financial authorities from flagging the questionable amount of funds he was using, Moore used a portion of investors’ money to buy crypto and send limited returns to early investors. 

“The Respondents made payments in Bitcoin to investors through their cryptocurrency wallets until approximately February 2022. These payments were sporadic and were not typically made on a daily basis. Several investors had only received a fraction of the returns that they expected,” the prosecutors said in a court filing.

These payments gave the investors some promise that the mining operations were functional, prompting some of them to recruit friends and family into the scheme unbeknownst to them.

“Mr. Moore used the newness of cryptocurrency to commit an age-old fraud, a Ponzi scheme. “He solicited more than $900,000 from some 40 investors… instead, the money went to support a lavish lifestyle and to pay off the earliest investors to keep the fraud going,” remarked US Attorney Miller.

Ponzi scheme victims included friends and athletes

Moore’s victims came from several states, including Utah, Oregon, Connecticut, New Jersey, and Washington. Prosecutors said many were recruited from his rugby circles, using personal relationships and trust to lure them into investing. The scheme ultimately left many of these relationships in tatters. 

During his sentencing hearing, Judge Lin told Moore he had “caused emotional and psychological damage to the victims.”

“Most people have suffered serious trauma like you,” Judge Lin beckoned to Moore in court. “But you have also had many opportunities and advantages that many people have not.”

In total, prosecutors estimate that Moore solicited over $900,000 in investment capital from approximately 40 individuals. Still, actual financial losses amounted to over $387,000, due in part to partial returns that were sent to some investors to keep the scheme running.

Despite the government’s push for a 36-month sentence, the court imposed a 30-month term of imprisonment. Moore will also be required to pay restitution to the victims.

Your crypto news deserves attention - KEY Difference Wire puts you on 250+ top sites