Two Orange County men who admitted to swindling investors of $1.9 million dollars with a cryptocurrency offering were sentenced Monday, Aug. 1, to federal prison.
Jeremy David McAlpine, 26, of Fountain Valley was sentenced to three years and Zachary Michael Matar, 29 of Huntington Beach was sentenced to two years, six months more than a year after each admitted to taking part in securities fraud, according to the U.S. Attorney’s Office.
According to federal prosecutors, McAlpine and Matar persuaded thousands of investors to buy cryptocurrency the pair claimed would provide buyers with exclusive access to a profitable trading program.
However, the trading program wasn’t actually profitable, prosecutors say, and the men used the bulk of the $1.9 million they raised on payments to themselves or their associates.
The scheme was run through Dropil, a Belize-based company that McAlpine and Matar operated out of Fountain Valley. The company was focused on investing in digital assets such as cryptocurrency, but prosecutors say neither man, nor the company itself, were registered with the Securities and Exchange Commission as a broker or a dealer.
The company touted it’s own digital asset, which the men referred to as DROP tokens, and an automated trading bot they called “Dex.” The DROP tokens were the only way to use Dex, according to court filings, so buying the cryptocurrency gave investors access to the automated trading bot.
The two men allegedly lied about the…
