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San Francisco Man Charged In Alleged Cryptocurrency Investor Fraud Scheme
San Francisco, CA – Japheth Dillman, a 44-year-old San Francisco resident, was arrested in connection with an alleged scheme to defraud victims into investing in a San Francisco-based cryptocurrency trading fund.
According to the complaint filed on April 26, 2022, Dillman was a general partner of Block Bits Fund I, LP, a limited partnership incorporated in Delaware with a principal place of business in San Francisco. Dillman allegedly represented to potential investors that Block Bits Fund was developing a novel autotrader that would automatically complete cryptocurrency arbitrage trades on different exchanges.
The complaint alleges that Dillman told potential investors that Block Bits Fund would profit from exploiting the price differences between different cryptocurrencies being sold on various exchanges. However, Dillman allegedly made false representations regarding the status and functionality of the technology underlying the autotrader and the manner investor funds were being used.
It is alleged that Dillman and another general partner, David Mata, 42, of Spokane, Wash., raised approximately $960,000 from investors by misrepresenting the status and functionality of the technology underlying the autotrader and by making false representations regarding the manner investor funds were being used.
The misrepresentations Dillman allegedly made are described in the complaint. For example, Dillman represented to multiple investors in June and July 2017 that the autotrader was already functioning and returning a substantial profit to Block Bits Fund. In fact, according to the complaint, there was no functioning autotrader at the time, and any claims regarding the autotrader’s ability to generate profits were false.
Japheth Dillman is charged with one count of wire fraud. The investigation is ongoing. The U.S. Attorney’s Office, the FBI, and the IRS-CI are working together to bring those responsible to justice. We urge anyone who may have invested in Block Bits Fund to contact the authorities with any information.
The complaint alleges that Block Bits investors lost approximately $508,000 due to Dillman’s scheme. Dillman was arrested and will face trial for his alleged crimes.
Defendant: Japheth Dillman, 44, of San Francisco, CA
Criminal Charge: One count of wire fraud
City and State: San Francisco, CA
Exact Date: The complaint was filed on April 26, 2022
Sentence or Outcome: Dillman is currently in custody and will face trial for his alleged crimes
Dollar Amounts: $960,000 raised from investors, $508,000 lost by Block Bits investors
Key Facts
- State: California
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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