Zooming in on Orange County in California, two men were found swindling more than 2,000 crypto investors for $1.9 million, according to the Department of Justice. Jeremy McAlpine, 26, and Zachary Matar, 29, were sentenced to prison on Monday for conducting a crypto scam.
In 2017, McAlpine and Matar launched Dropil Inc., portrayed as an investment management service and trading program. In 2018, during the initial coin offering (ICO), investors were offered annual returns of up to 63% in DROP, Dropil’s token. That is if they bought some during the ICO. This annual return would come via ‘Dex’, an automated trading bot.
It was a tempting offer, one that many did not resist. However, later on, it was found that Dex had never actually operated, much less generated profits. McAlpine and Matar had gone as far as creating fake profitability reports and providing a false number of investors.
McAlpine and Matar were both sentenced to federal prison for three years, and two and a half years respectively after pleading guilty to security fraud in August 2021. In July 2021, they also pleaded guilty to civil securities violations.