US Judge Orders Imprisonment Of Bitcoin Ponzi Operator

A bitcoin Ponzi operator had pleaded guilty back in 2015 for committing securities fraud and a district judge recently issued an order for the arrest and imprisonment of the individual in question.

This was after he had ignored several orders of the court and did not pay $40 million to the US Securities and Exchange Commission (SEC).

The order

Earlier this week, the US District Court judge for the Eastern District of Texas, Amos L. Mazzant issued an order for the arrest of a bitcoin Ponzi operator.

The judge said that unless the operator is able to provide overdue payments and documents, he needs to be imprisoned because of civil contempt.

Hailing from McKinney, Texas, Trendon Shavers owes more than $40 million to the Securities and Exchange Commission (SEC) in the US.

This was after he had pled guilty to one count of securities fraud back in September 2015. But, Judge Mazzant stated that the individual had disregarded court orders repeatedly.

The judge said that the disregard that Shavers had shown for the court orders several times resulted in one conclusion that he would only comply with the orders if he is incarcerated.

The crime

Back in July 2013, the SEC had filed charges against Shavers and his firm called Bitcoin Savings and Trust because he was running a Ponzi scheme.

The authorities said that he had stolen 764,000 BTC from his clients. A ruling had been obtained by the SEC against Shavers in September 2014.

At the time, the regulator stated that the judgement from the court required Shavers and his company to pay a sum of $40 million because of disgorgement and interest.

A civil penalty had also been imposed on every defendant of about $150,000.

The contempt order

The contempt order that Judge Mazzant has issued is focused on the efforts of the SEC to enforce the civil judgement of $40 million that Shavers has not complied with.

Shavers had been asked by the securities regulator to provide some financial documents for determining his ability to pay the disgorgement.

The Ponzi scheme operator testified that he was currently earning about $4,000 per month and that he had not made any payments in regard to the civil judgement.

He was ordered by the court to provide the documents that the SEC had asked for and to make six payments of $400 each.

However, he had not presented the required documents and had only made four out of the total six ordered.

This resulted in more motions from the SEC and more orders for Shavers. In addition, the district judge also said that the man had also not appeared for a hearing.

All of these actions drove the judge to state that the only way they could get Shavers to comply with the orders of the court was through imprisonment, which resulted in the latest orders.

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