Scammers used stolen crypto on shark tank, private jets and more

A group of scammers convicted in an Austrian court for operating a fraudulent crypto scheme spent their ill-gotten gains fueling their lifestyles, including buying a shark tank, a villa, private jet rides, a luxury car, parties in clubs and more.

According to an Oct. 23 report from Austrian news outlet Heute, the crypto fraud snared about 40,000 people and netted the scammers about $21.6 million (20 million euros).

Victims were promised their funds would be used to generate high returns through investments in EXW Wallet, the EXW crypto token, and real-estate projects.

EXW Wallet launched in late 2019, promising holders of EXW tokens a 0.1% to 0.32% daily return on their investment. However, the whole scheme collapsed in 2020 only a few months later.

In September 2023, Austrian prosecutors initially indicted eight of the people involved in EXW for serious commercial fraud, money laundering, criminal association and operating a pyramid scheme; more people were charged in the following months.

On Oct. 23, a Klagenfurt Regional Court convicted five of the people involved in the scheme. Judge Claudia Bandion-Ortner sentenced two of the defendants to five years behind bars without parole, and two were sentenced to 30 months.

One defendant received 18 months of prison time for their role in the scam. Another five were acquitted. The eleventh defendant was absent from court. Some are reportedly planning to appeal their sentences. Previous convictions of three defendants are being counted towards their sentences.  The group was reportedly made up of nine Austrian citizens, one Italian and one Croatian.

Investigation resulted in Austria’s largest fraud trial

Heute billed the trial as “Austria’s largest fraud trial.” It took just over a year, with 60 days in court, 300 hours of negotiations, and 3,000 file components.

Prosecutor Caroline Czedik-Eysenberg said the investigation was made significantly more complicated because the scammers’ headquarters was abroad, in countries like the UAE that don’t have extradition agreements with Austria.

The fraudsters also used front companies, communicated via Telegram, which doesn’t share users’ data with authorities, and had accounts spread across multiple junctions worldwide.

Money was also exchanged on crypto platforms, and some of the stolen cash was transported to Austria in plastic bags.

Some of the accused fled abroad before they could be caught. Others turned themselves in voluntarily.

Prosecutors argued scammers fraud was planned from the start

Czedik-Eysenberg said the fraud was planned from the beginning, and the defendants never intended to follow through on their promises to investors.

“There were never any profitable projects, and that was never planned. They were only there to attract customers,” she said.

An attorney acting for one of the defendants, Philipp Tschernitz, argued that his client never intended to defraud anyone; the scheme became too big for him to handle.

Tschernitz said his client “invested a lot of work and planned to make profits with various assets.”

Some of the accused in this case are also being investigated for a cannabis-related fraud case where it’s alleged $17.2 million (16 million euros) was stolen from over 17,000 victims.