Two US-based gold dealers are reportedly pleading guilty over their roles in a nationwide scam involving cryptocurrencies.
According to a new report from The State, Kenneth Brown Jr. and Nicholas Shepard – the operators of the Golden Eagle gold and precious metals exchange – agreed to plead guilty to a federal charge of conspiracy to commit bank fraud and mail fraud.
The duo are said to be part of a “renowned and large money laundering network” that took $600,000 from victims between 2021 and 2022.
The scam allegedly involved Brown and Shepard’s Golden Eagle, which received checks from victims of a romance scam known as pig slaughter. In this scheme, bad actors use online personas to establish intimate relationships with victims so they invest in fraudulent opportunities.
According to prosecutors, the victims of the romance scam sent their own money to Golden Eagle. The victims also received money from compromised companies, supposedly to serve as fake profits from the fraudulent investments, but the money was ultimately sent to Golden Eagle as well.
The funds would then be transferred to the now-defunct crypto platform Voyager before being converted into digital assets.
However, in an email to the state, Brown’s attorney said the men were also victims of the scam and did not know they were participating in it.
“What is disputed by no one is that Mr. Brown and his brother-in-law, Mr. Shepard, were groomed to engage in this behavior by members of a reputable and major money laundering network. Our customers were unaware of how these individuals deceived end users.
Mr Brown was devastated when he realized that the money he was converting into cryptocurrency allegedly came from victims of a romance scam. He immediately began to cooperate [with authorities] and has also willingly forfeited a significant amount of assets in order to pay the majority of the restitution.”
Brown and Shepard both face a maximum penalty of 20 years behind bars and a maximum fine of $250,000.
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