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Two Charged With Duping Investors Out of $5M With Bogus Bitcoin-Buying Brokerage
The pair allegedly left victim's funds in an escrow service that was actually their money-laundering front.
By Danny Nelson
Updated Sep 14, 2021, 9:55 a.m. Published Sep 14, 2020, 8:26 p.m.
New York federal prosecutors charged two men with running a phony bitcoin brokerage service that duped victims of $5 million.
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- As alleged in a criminal complaint unsealed Monday, former fugitive Randy Craig Levine and disbarred attorney Philip Reichenthal never bought their two high-rolling investors any bitcoin despite promising to do so.
- One victim, an unnamed "purported cryptocurrency escrow firm," wired Levine $3 million to fund an over-the-counter desk's bitcoin buy, according to prosecutors, who said the second victim, a Florida bitcoin investor, wired Levine $2 million.
- Levine allegedly told the victims their funds were moved into an "escrow" service and then stopped responding to the victims' questions.
- But Levine's escrow was actually Reichenthal's money-laundering front, prosecutors allege. They claim Reichenthal wired millions to Russian, Mexican and Guatemalan bank accounts controlled by Levine aliases.
- Levine and Reichenthal allegedly pocketed the money, giving their victims no refunds or bitcoin.
- The pair face allegations of wire fraud, money laundering and commodities fraud in New York federal district court.
- Levine is currently awaiting extradition from Austria; he's been on the run from U.S. authorities since 2005. Reichenthal was disbarred last October in a Florida court.
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