Man sentenced to three years in prison for $2.9 million cryptocurrency scam

Source: PortaldoBitcoin Original Title: Man Sentenced to Three Years in Prison for $2.9 Million Cryptocurrency Scheme Fraud Original Link: A 54-year-old man from Utah has been sentenced to three years in federal prison for operating an illegal money conversion business involving cryptocurrencies and defrauding investors of nearly US$ 3 million.

Brian Garry Sewell, from Washington County, was sentenced to 36 months in prison, followed by three years of supervised release, after pleading guilty to electronic fraud.

The judge also ordered the payment of over US$ 3.8 million in restitution, including payments to investors and the Department of Homeland Security.

The sentence will run concurrently with a three-year sentence imposed in another federal case involving an illegal money transfer business, according to the Department of Justice.

The case suggests that federal authorities are increasingly willing to prosecute smaller and regional cryptocurrency operators under the same laws and sentencing frameworks used for larger platforms and urban centers.

Federal prosecutors stated that Sewell “obtained money from at least 17 investors by lying about his experience, education, and ability to generate large returns” between December 2017 and April 2024, according to public documents detailing the case.

“Sewell took advantage of his victims by lying about his experience and promising returns he could not deliver, leaving individuals and families to bear the consequences of his deception,” said Special Agent Robert Bohls of the FBI Salt Lake City in a statement.

By bringing parallel charges of fraud and wire transmission in Utah, prosecutors appear to be signaling that geographic scale or informality do not offer protection against law enforcement when cryptocurrencies are used to move or conceal illicit funds.

“It is becoming increasingly common, almost a ‘standard practice,’ in cases involving retail cryptocurrency fraud,” said Andrew Rossow, public relations attorney and CEO of AR Media Consulting.

The illegal money transmission charge “serves as a guarantee for prosecutors: it ensures a conviction for a serious crime based on the illegal operation itself, regardless of whether the jury believes the defendant intended to defraud someone,” Rossow explained.

“Considering that Utah is far from Wall Street, the Department of Justice is demonstrating the extent of its investigative resources,” he added, noting that the case “shows that the size of the financial loss to investors is not the only factor prompting the Department of Justice to act” and to actively combat illicit financial activities.

The federal case against Sewell unfolded over approximately two years, beginning with an investigation into his cryptocurrency money conversion operations in 2020, followed by formal charges in 2024.

Taking into account the underlying conduct, the case spanned nearly five years, from investigation to resolution.

Court records show that Sewell initially pleaded not guilty after the formal charge, with prosecutors filing parallel charges of electronic fraud and illegal money transmission during pre-trial proceedings. Sewell’s fraudulent conduct resulted in losses of over US$ 2.9 million for victims, prosecutors said.

The unlicensed money transfer conduct cited in Sewell’s sentence dates back to a previous federal charge in Washington County, where IRS prosecutors alleged he and another defendant operated a cryptocurrency money conversion business.

This scheme moved more than US$ 5.4 million through Sewell’s Rockwell Capital Management, forming the basis for charges later filed alongside his electronic fraud case.