NY Man Admits Guilt in $2M Crypto Mining Fraud

A man has pleaded guilty to defrauding customers who bought cryptocurrency-mining products and services.

Chester J. “Chet” Stojanovich pleaded guilty Tuesday (Nov. 29) to wire fraud after telling customers he would provide them with crypto-mining computers (“Miners”) and Miner hosting services, but instead keeping the money and not delivering what he promised, the U.S. Attorney’s Office for the Southern District of New York said Tuesday in a press release.

Between about March 2019 and the time he was arrested and charged last April, through companies that included Chet Mining, Stojanovich defrauded more than a dozen victims and collected more than $2 million, according to the release.

“Cryptocurrency mining has generated much media attention and public excitement in the past few years, but new forms of money and investment can also generate fresh opportunities for old-fashioned fraud,” U.S. Attorney Damian Williams said in the release. “Chet Stojanovich has pled guilty to using those time-worn fraud techniques on this new financial frontier as he stole millions of dollars from victims who thought they were investing in cryptocurrency mining.”

Stojanovich pled guilty to one count of wire fraud and faces a maximum penalty of 20 years in prison. His sentencing is scheduled for March 2, according to the press release.

As PYMNTS reported Nov. 10, the Consumer Finance Protection Bureau (CFPB) received more than 8,300 complaints related to crypto-assets between October 2018 and September 2022, most of them in the last two years.

In about 40% of crypto-asset complaints handled since 2018, consumers said frauds and scams were the main issues. Beyond hacks, the bureau pointed to other risks, such as romance scams, fraudulent transactions and greater market volatility.

“Our analysis of consumer complaints suggests that bad actors are leveraging crypto-assets to perpetrate fraud on the public,” CFPB Director Rohit Chopra said at the time.