BitConnect founder Satish Kumbhani, indicted by a federal grand jury last week for orchestrating a $2.4 billion global Ponzi scheme, can't be found, according to a recent U.S. Securities and Exchange Commission court filing.
In its Feb. 28 filing with the U.S. District Court in New York, the SEC admitted it "did not know the whereabouts of Kumbhani, an Indian citizen" when it filed an action against him in the same court in November.
BitConnect founder Satish Kumbhani
| linkedin.com/in/satish-kumbhani-614974140/
Kumbhani, 36, whose last known address was in Hemal, India, "has likely relocated from India to an unknown address in a different foreign country," the SEC said in its filing.
"Since November, the Commission has been consulting with that country’s financial regulatory authorities in an attempt to locate Kumbhani's address," the SEC said. "At present, however, Kumbhani’s location remains unknown, and the commission remains unable to state when its efforts to locate him will be successful, if at all."
The filing came three days after the U.S. Department of Justice announced a federal grand jury in San Diego had indicted Kumbhani.
"BitConnect is an alleged fraudulent cryptocurrency investment platform that reached a peak market capitalization of $3.4 billion," DOJ said in its Feb. 25 news release announcing the indictment. If convicted of all counts, according to the release, Kumbhani could face a maximum of 70 years in prison.
Kumbhani's LinkedIn page describes himself as an "Asian leader" and reports he lives in Surat, Gujarat, India. It also says BitConnect, which started up in 2016, is still in operation. However, the page also notes Kumbhani "hasn't posted lately."
Kumbhani is alleged to have misled investors about BitConnect's lending program under which the company's proprietary technology known as the "BitConnect Trading Bot" and "Volatility Software" could supposedly make huge profits and guaranteed returns. The technology was supposed to use investors' money to trade on cryptocurrency exchange markets, but it actually was a Ponzi scheme by that paid off earlier BitConnect investors with money from later investors, according to the news release.
"In total, Kumbhani and his co-conspirators obtained approximately $2.4 billion from investors," the release said.
After about a year of swindling BitConnect investors, Kumbhani "abruptly shut down" the lending program and directed the company's "network of promoters" to keep the scheme going, the news release said. Kumbhani "and his co-conspirators" also allegedly concealed where "the fraud proceeds" were located.
In September 2018, authorities in Illinois and Arizona asked India’s Criminal Investigation Department officials in the Indian state of Gujarat to "seize the property of the promoters of a cryptocurrency investment firm BitConnect," Kumbhani and his alleged associate Divyesh Darji.
