Phillip Reichenthal and Randy Levine ordered to pay $5+ million in restitution for crypto fraud
Reichenthal and Levine pled guilty in a parallel criminal action in the Southern District of New York. The court sentenced Reichenthal to time served with three years of supervised release and Levine to a term of 70 months imprisonment.
The CFTC has settled with Phillip J. Reichenthal and Randy Craig Levine for engaging in digital asset fraud, the regulator announced.
Reichenthal and Levine were found to have engaged in a scheme to defraud bitcoin investors through off-exchange bitcoin transactions in or about 2018. The two defendants induced two separate groups of investors to send Reichenthal a combined total of over $5.3 million to buy bitcoin from Levine.
Reichenthal, an attorney licensed in Florida, promised investors he would hold their funds in escrow in his attorney trust account until a purported Bitcoin transaction with Levine could take place.
After Reichenthal received the investors’ funds, he transferred the funds to accounts controlled by Levine and no bitcoin was delivered to investors. The CFTC concluded that the two fraudsters never intended for the bitcoin to be delivered to the investors and failed to return the investors’ funds as promised.
Both Reichenthal and Levine have agreed to a settlement with the CFTC, which ordered the defendants to pay $5.375 million in restitution.
CFTC’s Kristin Johnson said crypto fraud has become all too common
Reichenthal and Levine pled guilty in a parallel criminal action in the Southern District of New York. The court sentenced Reichenthal to time served with three years of supervised release and Levine to a term of 70 months imprisonment.
“Unfortunately, digital commodity asset or cryptocurrency related fraud has become all too common. Fraudsters often take advantage of individual retail customers’ fear of missing out on and interest in access to novel asset classes to perpetrate their scams. Investor education and enforcement actions are critical to our efforts to prevent fraudsters from deceiving hard-working investors”, said CFTC Commissioner Kristin Johnson.
“Accordingly, I strongly encourage all members of the public to stay informed about the potential scams and abuses in digital assets markets by visiting our investor advisory page. Fraudsters offering guaranteed or unusually high returns—or both—should in particular prompt scrutiny and additional diligence before transferring any funds.”
