US Govt clashes with ICO fraudster Maksim Zaslavskiy over restitution
More than a year has passed since the sentencing of Maksim Zaslavskiy, the person behind the Initial Coin Offerings (ICOs) of REcoin Group Foundation, LLC and Diamond Reserve Club. Discussions around the restitution to be paid to the victims of the fraudulent schemes, however, continue.
Earlier today, the Department of Justice (DOJ) filed a Letter with the New York Eastern District Court regarding the restitution in this case. The document, seen by FX News Group, sheds light on two developments:
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the sums recovered for the victims are relatively small;
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the US authorities and Zaslavskiy disagree on the rate of the payments.
Today’s Letter shows that the government requests that the Court issues an Order directing Amazon to disclose identifying information for the victims of the fraud to allow the government to recover $26,543.49 in restitution, as agreed to by the defendant.
The rate of the repayments sparks disagreement between the parties. Zaslavskiy requests that the Court order the restitution to be repaid at the rate of 10% of his gross monthly income.
While the government defers to the Court on the rate at which restitution should be repaid, it finds that the rate proposed by the defendant is inadequate. First, in the government’s view, the rate of repayment should be determined by the defendant’s income and the government requests that the defendant be required to provide an update regarding his current employment and any future opportunities to permit the Court to better assess the appropriate repayment plan.
Moreover, the government notes that when arguing for a non-custodial sentence, on November 18, 2019, the defendant, through counsel, stated on the record that “his parents stand ready to provide him with the money to make [his victims] immediately whole.” It does not appear that a rate of 10% would make the defendant’s victims whole expeditiously, and certainly not “immediately,” the Government says.
Let’s recall that, in November 2019, Zaslavskiy was sentenced by United States District Judge Raymond J. Dearie to 18 months’ imprisonment for conspiring to commit securities fraud.
In July 2017, Zaslavskiy marketed RECoin as “The First Ever Cryptocurrency Backed by Real Estate,” and subsequently Diamond as an “exclusive and tokenized membership pool” hedged by diamonds. In reality, Zaslavskiy bought neither real estate nor diamonds, and the certificates he sent to investors were worthless.