$2 million scam: Chet Stojanovic pleads guilty

According to Damian Williams, U.S. Attorney for the Southern District of New York, on November 29, 2022 Chet Stojanovic pled guilty to fraud and misappropriation of funds. He used fraudulent misrepresentations that he would provide them with specialized cryptocurrency-mining equipment and hosting services. 

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,

Williams remarked in reference to the Stojanovic case.

What was Chet's scheme? Since 2019, Stojanovich has been in charge of various companies, including Chet Mining Co. LLC (“Chet Mining”). According to their official information, companies sold mining equipment and provided reliable hosting services. Clients who wanted to purchase computers and additional services from Stojanovic, relied on him with the hope of getting a steady stream of high income. For this reason, those people gave Stojanovic so much money without hesitation

The investigation found that at least 12 victims spent more than $2 million on equipment.  After receiving the funds, Chet convinced them to purchase equipment and hosting services. At the moment we know that there were 10 victims in 2019 and at least three in 2021. The crimes' circumstances varied a little:

• In 2019, Stojanovic and Chet Mining received over $2 million in bank wires and cryptocurrency transfers from 10 clients for the purchase of miners and hosting. Equipment and services were not provided to any of those who transferred the funds;

• In 2021, Stojanovic received $179,880 from three clients for acquiring 127 miners. In contrast to the previous scam, he provided the customers with three miners and returned $61,000 as compensation. That money was misappropriated from another customer.

Stojanovic is accused of failing to provide paid miners, hosting services and creating the illusion of fulfilling his obligations in various deceitful ways. What did he do with the misappropriated funds? In the classic style, Chet used them to pay for personal expenses – charter flights, hotel stays, private parties, and limousines.

The first lawsuits from the victims were received by the Manhattan federal court in the spring of 2022, after which Stojanovic was called to appear for a deposition on March 4. He fled to Canada after giving law enforcement officials partially false information. Shortly thereafter, Chet was arrested on April 11, following his attempt to re-enter the United States. The FBI was actively involved in the investigation.

Chester Stojanovic pled guilty to wire fraud more than six months after being arrested. He might spend up to 20 years in prison.