Satish Kumbhani Indicted in San Diego for $2.4 Billion Scheme, Vanishes

India-West Staff Reporter

SAN DIEGO, CA – A federal grand jury here on Feb.25 had returned an indictment charging the founder of BitConnect Satish Kumbhani, 36, of Hemal, India with orchestrating a global Ponzi scheme.

Now it is learned, Kumbhani has simply vanished.

Kumbhani, “has likely relocated from India to an unknown address in a foreign country,” the Securities and Exchange Commission attorney Richard Primoff said in a court filing. He Primoff asked U.S. District Judge John Koeltl for an extension until May 30. The SEC said it wants to look for Kumbhani and if it finds him in the U.S., serve him with the complaint.

BitConnect is an alleged fraudulent cryptocurrency investment platform that reached a peak market capitalization of $3.4 billion.

According to court documents, the founder of BitConnect, misled investors about its “Lending Program.” Under this program, Kumbhani and his co-conspirators touted its purported proprietary technology, known as the “BitConnect Trading Bot” and “Volatility Software,” as being able to generate substantial profits and guaranteed returns by using investors’ money to trade on the volatility of cryptocurrency exchange markets. As alleged in the indictment, however, the Department of Justice said, it operated as a Ponzi scheme by paying earlier investors with money from later investors. In total, Kumbhani and his co-conspirators obtained approximately $2.4 billion from investors.

The indictment further alleges that, after operating for approximately one year, Kumbhani abruptly shut down the Lending Program. Kumbhani then directed his network of promoters to fraudulently manipulate and prop up the price of BitConnect’s digital currency, a commodity known as BitConnect Coin (BCC), to create the false appearance of legitimate market demand for it.

Kumbhani and his co-conspirators also concealed the location and control of the fraud proceeds obtained from investors by commingling, cycling, and exchanging the funds through BitConnect’s cluster of cryptocurrency wallets and various internationally based cryptocurrency exchanges, the DoJ said.