Instagram influencer charged over duping followers out of $2.5M BTC

A social media influencer known for “cash giveaways” has failed to show the money in alleged Bitcoin wire fraud scheme.

An Instagram influencer has been charged with wire fraud, after he allegedly scammed followers out of $2.5 million worth of Bitcoin.

Social media influencer Jay Mazini, who boasted of a net worth of $33 million and is known for “cash giveaways”, is accused by the Department of Justice of operating a wire fraud scheme in which he duped some of his 1 million followers to send him Bitcoin in exchange for inflated cash offers, which he failed to pay properly.

The DoJ announced the charges on March 24, following a complaint filed in Brooklyn Federal Court the day before. The FBI investigation into the case is still ongoing, with FBI Assistant Director-in-Charge William F. Sweeney noting:

“Igbara’s social media persona served as a backdrop for enticing victims to sell him their Bitcoin at attractive, but inflated, values. A behind-the-scenes look, however, revealed things aren’t always as they seem. There was nothing philanthropic about the Bitcoin transactions Igbara engaged in with his victims.”

Sweeney added: “A quick search of the Interwebs today will reveal an entirely different image of this multimillion-dollar scammer.”

According to DoJ documents, the influencer offered to pay followers between 3.5% to 5% over market value for Bitcoin, claiming traditional crypto exchanges had capped how much Bitcoin he could purchase.

The alleged wire fraud scam took place between January to late February, with the influencer soliciting followers on Twitter and Instagram. During that time, the price of Bitcoin shot up from around $29,000 to more than $49,000. According to the complaint, when Bitcoin was valued at around $47,000 on Feb. 14, the defendant offered to buy Bitcoin at $52,500.

It is alleged that after Mazini received Bitcoin from his fans, he sent back falsified payment receipts to reflect agreed-upon prices, in which he either failed to send the full amount or never sent the money.

According to the complaint filed on March 23, Mazini negotiated with one of his followers to purchase 50 BTC for $2.56 million, with the seller sending the agreed amount of BTC to only receive $500,000 in return.

Mazini is currently being held on state charges in New Jersey and will face New York courts at an undetermined date. If convicted, he faces up to 20 years’ imprisonment.

In the DoJ release, IRS-CI Special Agent Jonathan D. Larsen, warned fans of social media influencers to “beware” of falling prey to social media crypto scams, noting the “defendant allegedly used his online popularity to defraud those seeking to exchange Bitcoin for cash above the market value. Always be on your guard and don’t fall prey to these cryptocurrency schemes.”