Crypto Ponzi Scheme Mastermind Sentenced to 97 Months in Federal Prison for $40 Million Fraud

A federal judge in Brooklyn has sentenced Dwayne Golden to 97 months in prison for orchestrating a sophisticated cryptocurrency fraud scheme that defrauded investors of more than $40 million. The case represents one of the most significant crypto-related Ponzi scheme prosecutions to date and highlights the ongoing challenges facing regulators in the rapidly evolving digital asset space.

The Scheme: False Promises and Guaranteed Returns

Between April and August 2017, Golden, along with co-defendants Gregory Aggesen, Marquis Demacking Egerton (also known as "Mardy Eger"), and William White, operated three fraudulent digital asset companies: EmpowerCoin, ECoinPlus, and Jet-Coin. These entities presented themselves as legitimate cryptocurrency trading operations, promising investors guaranteed fixed returns through what they claimed were sophisticated overseas digital asset trading operations.

The promise of guaranteed returns should have been a red flag for potential investors, as legitimate cryptocurrency investments carry inherent risks and cannot guarantee profits. However, the defendants exploited the general public's limited understanding of cryptocurrency markets and the excitement surrounding emerging blockchain technologies to attract unsuspecting victims.

In reality, no legitimate trading operations existed. Instead, the companies operated as classic Ponzi schemes, using funds from new investors to pay returns to earlier participants while the operators siphoned off millions for personal use. This unsustainable model inevitably collapsed when the flow of new investments could no longer support payments to existing investors.

The Scale of the Fraud

The scope of the scheme was substantial, with the three companies collectively receiving more than $40 million from investors during their brief period of operation. The rapid timeline—just four months—demonstrates how quickly fraudulent operations can scale in the digital asset space, particularly when leveraging online marketing and the viral nature of investment opportunities shared through social media and word-of-mouth referrals.

The victims of this scheme included individuals who believed they were participating in legitimate cryptocurrency trading activities. Many investors likely viewed these opportunities as a way to participate in the emerging digital asset economy without having to navigate the complexities of cryptocurrency exchanges and trading platforms themselves.

Obstruction of Justice: A Five-Year Cover-Up

The criminal activity didn't end with the collapse of the Ponzi schemes. From July 2017 through March 2022—a period spanning nearly five years—Golden, Aggesen, and White engaged in a coordinated effort to obstruct federal investigations into their fraudulent activities.

This obstruction took multiple forms and targeted different federal agencies. The defendants worked to hinder both a Federal Trade Commission investigation and a federal criminal grand jury investigation. Their obstruction activities included the systematic destruction of evidence and the provision of false and misleading information to federal investigators.

William White played a particularly active role in the obstruction efforts, acting on behalf of Aggesen to provide false information to the FTC and submitting misleading responses to federal grand jury subpoenas. This extended period of obstruction demonstrates the defendants' awareness of the serious nature of their crimes and their determination to avoid accountability.

Legal Consequences and Sentencing

United States District Judge William F. Kuntz, II, imposed the 97-month sentence on Golden following his guilty plea in September 2024 to charges of conspiracy to commit wire fraud and money laundering. The sentence reflects the serious nature of the crimes and serves as a deterrent to others who might consider similar schemes.

In addition to the prison sentence, Golden was ordered to forfeit approximately $2.46 million in ill-gotten gains. The court will determine restitution amounts at a later date, with the goal of providing some measure of recovery for the victims who lost their investments.

The case has progressed through the court system with all four defendants ultimately pleading guilty. William White has already been sentenced to 30 months in prison, while Gregory Aggesen and Marquis Egerton await their sentencing hearings.

Victim Recovery Efforts

Recognizing the significant financial harm caused to investors, federal authorities have established a process for victims to seek restitution. Individuals who invested in EmpowerCoin.com, ECoinPlus.com, or Jet-Coin.com can submit claims for restitution through the FBI's dedicated website at fbi.gov/jetcoinscams.

This victim recovery process is crucial for providing some measure of financial relief to those who lost money in the schemes. However, as is often the case with Ponzi schemes, full recovery of invested funds is unlikely, as much of the money was either paid out to earlier investors or spent by the perpetrators.

Broader Context: Crypto Enforcement Trends

The Golden case is part of a broader pattern of increased enforcement activity by federal authorities in the cryptocurrency space. The case was handled by the Eastern District of New York's Business and Securities Fraud Section, with assistance from the Asset Recovery Section for forfeiture matters.

The prosecution benefited from collaboration between multiple federal agencies, including the Federal Bureau of Investigation and the Commodity Futures Trading Commission. This inter-agency cooperation reflects the complex nature of cryptocurrency fraud cases, which often involve multiple jurisdictions and require specialized expertise in digital asset technologies.

Regulatory Implications and Investor Education

The case highlights several important lessons for cryptocurrency investors and regulators. First, the promise of guaranteed returns in any investment context should be viewed with extreme skepticism, particularly in the volatile cryptocurrency market, where legitimate returns cannot be guaranteed.

Second, the case demonstrates the importance of thorough due diligence before investing in any cryptocurrency-related opportunity. Investors should verify the legitimacy of any company or platform, understand the specific trading strategies being employed, and be wary of opportunities that seem too good to be true.

The prosecution also underscores the federal government's commitment to pursuing cryptocurrency fraud cases aggressively. Despite the technical complexity and jurisdictional challenges often associated with digital asset crimes, federal prosecutors have demonstrated their ability to successfully investigate and prosecute these cases.

The Role of Technology in Modern Fraud

While the underlying structure of Golden's scheme was a traditional Ponzi model, the use of cryptocurrency and digital asset terminology allowed the perpetrators to exploit public interest in emerging technologies. This case illustrates how fraudsters adapt classic schemes to take advantage of new technologies and market trends.

The cryptocurrency space's relative newness and complexity create opportunities for bad actors to exploit investor confusion and enthusiasm. Many potential victims may lack the technical knowledge to properly evaluate cryptocurrency investment opportunities, making them vulnerable to sophisticated marketing campaigns that promise unrealistic returns.

Law Enforcement Response and Future Deterrence

The successful prosecution of this case sends a clear message that federal authorities are equipped to investigate and prosecute complex cryptocurrency fraud schemes. The lengthy sentences imposed on the defendants, particularly Golden's 97-month term, demonstrate that courts are treating these crimes seriously and imposing meaningful consequences.

The case also highlights the importance of obstruction of justice charges, which added significant time to the defendants' sentences. The five-year effort to impede federal investigations resulted in additional criminal liability and likely influenced the severity of the sentences imposed.

Lessons for the Cryptocurrency Industry

For legitimate participants in the cryptocurrency industry, this case serves as a reminder of the importance of compliance with federal securities laws and regulations. The case also demonstrates the potential reputational damage that fraudulent schemes can cause to the broader cryptocurrency ecosystem.

Industry participants should view cases like this as opportunities to reinforce the importance of investor protection measures and to distinguish legitimate cryptocurrency businesses from fraudulent operations. Clear communication about risks, transparent business practices, and compliance with applicable regulations are essential for building trust in the cryptocurrency space.

Conclusion

The sentencing of Dwayne Golden and his co-conspirators represents a significant victory for federal prosecutors and a measure of justice for the victims of their elaborate fraud scheme. The case demonstrates that while cryptocurrency technology may provide new tools for conducting financial crimes, traditional law enforcement methods and existing legal frameworks remain effective for pursuing accountability.

As the cryptocurrency industry continues to evolve and mature, cases like this serve as important precedents for how federal authorities will respond to fraudulent activities in the digital asset space. The substantial sentences imposed in this case should serve as a deterrent to others who might consider exploiting investor interest in cryptocurrency for criminal purposes.

For investors, the case provides valuable lessons about the importance of due diligence and skepticism when evaluating cryptocurrency investment opportunities. While the digital asset space offers legitimate opportunities for investment and innovation, it also provides fertile ground for sophisticated fraud schemes that require careful evaluation and regulatory oversight.

The ongoing efforts to recover funds for victims and the establishment of clear processes for restitution claims demonstrate the federal government's commitment not only to prosecuting these crimes but also to providing support for those who have been harmed by fraudulent schemes in the cryptocurrency space.