Five charged in alleged $722 million cryptocurrency Ponzi scheme

LOS ANGELES — Five men were charged Tuesday in connection with what federal prosecutors called a lucrative cryptocurrency scheme that fleeced investors out of $722 million in a business model that one of the defendants described as built “on the backs of idiots,” according to court documents.

The 27-page indictment, unsealed in U.S. District Court in Newark, New Jersey, names Matthew Brent Goettsche, 37, of Lafayette, Colorado; Jobadiah Sinclair Weeks, 38, of Arvada, Colorado; and Silviu Balaci, whose age and residence were not immediately known, as part of a conspiracy to commit wire fraud. They were also charged with conspiracy to offer and sell unregistered securities.

“What they allegedly did amounts to little more than a modern, high-tech Ponzi scheme that defrauded victims of hundreds of millions of dollars,” U.S. Attorney Craig Carpenito said.

Prosecutors allege that BitClub Network, which operated from April 2014 to this month, was built on soliciting money from individuals…