On Wednesday, the Federal Bureau of Investigation detained a 37-year-old man for an alleged crypto mining scam of over a dozen people out of $1.8 million in a lengthy crypto mining scheme.
Officials say Chester "Chet" Stojanovich pretended to be a crypto mining equipment dealer between March 2019 and September 2021, convincing would-be customers to pay large sums for mining machines as well as miner-hosting facilities, which Stojanovich assured to arrange at an institution in Goose Bay, Newfoundland and Labrador, Canada.
Stojanovich, according to the complaint, never met his commitments and kept the bulk of the money for himself in this cryptocurrency mining scam.
The alleged crypto mining scam in New York Scheme
According to the lawsuit, Stojanovich and other entities under his control, including Chet Mining, Chet Mining Canada, and Phoenix Data LLC, assured investors that they would be able to buy mining equipment on their behalf and have it hosted at the Goose Bay facility for a certain period.
The FBI claims that Stojanovich did not buy the equipment as promised, instead using "deceptive practices to create the illusion that such miners had been acquired and were being sued to provide hash power to [his] customers' accounts."
Stojanovich is accused of buying 72 S9 Miners from Amazon and two more from eBay, which he allegedly utilized as props in the crypto mining scam 2022.
According to the accusation, when his customers became suspicious and demanded proof of their purchases, Stojanovich would give them images of the miners he had purchased and photos of himself standing among the piled-up boxes.
In one case, a buyer who ordered 912 S9 miners from Stojanovich demanded that the company give proof of purchase, such as "serial numbers, insurance policy documents, or shipping documents." When Stojanovich could not produce evidence, the client asked that he be transported to the purported hosting facility in Goose Bay, a 31-hour journey from New York City, to inspect his purchase in person.
FBI Report On Crypto Fraud Arrest in New York
Per the FBI, the crypto mining grifter agreed, and he and the customer rented a car and drove to Goose Bay around Memorial Day weekend in 2019. As they approached the Canadian border, however, things between the two fell apart, and Stojanovich allegedly told the client that he would not be able to meet the miners after all.
"The trip abruptly ended in Buffalo, New York, where Stojanovich abandoned [the customer] at the airport and stated in substance and part that he would not pay any refund," according to the FBI.