A federal grand jury in the District of Oregon has handed down indictments against the individuals who are believed to have been the masterminds behind the “global Ponzi” scam known as Forsage, which is said to have generated $340 million.
According to a statement released by the Department of Justice (DOJ) on February 22, the four Russian founders, Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev, and Sergey Maslakov, have been formally accused of having key roles in the scheme that raised approximately $340 million from victim-investors. This information comes from the formal accusation.
U.S. Attorney Natalie Wight for the District of Oregon stated that “today’s indictment is the result of a rigorous investigation that spent months piecing together the systematic theft of hundreds of millions of dollars.” She also stated that “bringing charges against foreign actors who used new technology to commit fraud in an emerging financial market is a complicated endeavor only possible with the full and complete coordination of multiple law enforcement agencies.”
Forsage promoted itself as a low-risk, decentralized financial platform that was based on the Ethereum blockchain and offered customers the opportunity to create passive income over the long term. Blockchain analytics, on the other hand, allegedly shown that eighty percent of Forsage “investors” got back less money than they had initially contributed.
Analysis of the smart contracts, as reported by the Department of Justice (DOJ), indicated that monies that were obtained when new investors acquired “slots” in Forsage’s smart contracts were routed to older investors, which is consistent with the definition of a “Ponzi scheme.”
Forsage has an active Twitter account, on which they recently posted a thread saying that community members who take part in “The Ambassador Program” will be able to receive monthly incentives by accomplishing certain activities. The tweet was published on February 22.
The Securities and Exchange Commission filed charges of fraud and selling unregistered securities against the company’s four founders and seven promoters on August 1. At the time, acting chief of the SEC’s Crypto Assets and Cyber Unit Carolyn Welshhans said: “Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains.”
Back in 2020, the Philippines Securities and Exchange Commission had also raised concerns about Forsage, indicating that it may be a Ponzi scheme. However, one month later, the platform remained the second-most popular decentralized application (DApp) on the Ethereum blockchain.
When a prosecutor brings criminal charges against an individual or group and accuses them of committing an offense, this is referred to as a charge. However, an indictment is filed by a grand jury if prosecutors are successful in persuading a majority of the grand jury members that a formal accusation is warranted following an investigation.
The use of grand juries is widespread practice in the prosecution of significant federal and state criminal crimes.