Trendon Shavers, who was accused of unlawfully raising $4.5 million in Bitcoins while running Bitcoin Savings and Trust, on Monday pleaded guilty in a Manhattan court, saying that he is sorry and has full knowledge of the crime he has committed.
Shavers further reached a plea deal with the prosecutors under which he would not request any jail sentence at or below 41 years. The final judgement on him will be announced on February 3rd next year. For now, the accused has been granted a bail until the said date.
According to the available court documents, Shavers had lured people to invest hefty Bitcoin sums by promising a 7% return per week. He used to pay old investors by the money he had raised from the new ones. In the meantime, Shavers withdrew around 146,000 Bitcoins to pay for personal amenities, such as spa treatments, groceries, rents, etc. A good part of this money was also used in buying an expensive BMW M5 Sedan.
The prosecutors also found a link between Shavers and now-defunct Japanese exchange Mt. Gox, saying that the accused had invested a noticeable sum into the fraud company. He further informed that, at the peak of this Ponzi scheme, Shavers had controlled around 7% of the total Bitcoin circulation.
48 investors are reported to have fallen prey to Shavers’s scheme.