CT Man Pleads Guilty to $1.1M Crypto Fraud Scheme Tied to Online Gambling

A 25-year-old Connecticut, US, man has pleaded guilty to federal charges after defrauding more than 10 cryptocurrency investors of approximately $1.1 million, which authorities say he lost through online gambling. E.R., of Wolcott, entered guilty pleas Monday, October 19, in a federal court in Bridgeport. The man admitted guilt to two counts of wire fraud, as well as one count of international money laundering and one count of making a false statement to IRS criminal investigation agents, according to the US Attorney’s Office for the District of Connecticut. R. is currently free on a $500,000 bond and is scheduled to be sentenced at the beginning of next year, on January 11. His charges carry a combined maximum potential sentence of 65 years in prison, but the court will ultimately decide how much time he will actually spend behind bars for the crimes that he admitted to committing. As a reminder, in February of 2026, the man appeared in federal court in Hartford before Magistrate Judge Thomas O. Farris and entered a not guilty plea to all counts he was charged for. The court then decided to release him on a $500,000 bond while awaiting further proceedings. Investors Were Promised Cryptocurrency Profits According to information from the federal authorities, the scheme unfolded between May 2021 and March 2025. R. allegedly introduced himself as a cryptocurrency investor who had the means to generate high returns, thus managing to attract a lot of money from multiple wealthy investors. After receiving their funds, he told investors they had earned substantial profits but needed to pay additional fees, described as “gas fees,” before they could withdraw their earnings. Authorities said R. also claimed to work with a team that included a person known as “The Chef,” who supposedly decided when and how investors would receive their profits. Investigators found that the money was not invested in cryptocurrency as promised. Instead, authorities said R. transferred the funds to Stake.com, an offshore online gambling platform. Gambling Losses Went Over the $1.15 Million Mark According to prosecutors, R. used the gambling site to hold the funds, generate cryptocurrency addresses for victims to send Bitcoin and make large payments to investors to maintain the appearance that the investment scheme was legitimate. Authorities described those payments as “lulling” payments, intended to keep victims from suspecting the fraud. R.’s reported gambling losses on the platform totaled approximately $1,159,945, money that prosecutors said came from more than 10 victims. Federal officials also said he made several false statements to IRS criminal investigation agents during an interview in September 2023. As previously mentioned, R. was formally charged in February 2026. His guilty pleas now place the case on track for sentencing early next year.