Feds net 568% return selling seized bitcoin for $19.2 million – Crain’s Cleveland Business


Federal agents say they scored a 568% return on bitcoin that was seized in 2019 from a convicted Toledo fraudster — who was sentenced to jail for his role in a scheme for producing fake IDs — and sold sometime this year.

Bridget Brennan, acting U.S. attorney for the Northern District of Ohio, announced Thursday, July 1, that the feds had sold bitcoin taken from Mark Alex Simon for $19,227,204.64. The value of the cryptocurrency was $2,877,351.39 at the time of its seizure in 2018.

Simon, 37, was sentenced to two years in prison in fall 2019 for the crime of transferring false identification documents or authentication features and conspiracy to launder money.

Simon pleaded guilty to these charges in June 2019 for his part in a fake ID ring. As reported by The Toledo Blade, Simon mastered production of fake IDs and began selling them in college to underage students.

Simon eventually recruited others to help with his production line crafting fake driver’s licenses and personal ID cards that appeared to be issued by the states of Ohio, Michigan and Utah and which would be ordered through a website he ran. Buyers paid for the documents and shipping in bitcoin.

According to the Blade, evidence seized by federal investigators at the time included gold and silver coins and bars, $7,000 in cash, and $4.7 million in bitcoin. The items were forfeited as part of Simon’s guilty plea.

Though looking into answers, a spokesman for the Department of Justice said Friday, July 2, that the agency could not provide any other details at this time in response to some questions about the transaction, including why there seems to be a discrepancy between the purported value of the seized bitcoin in 2019 as reported elsewhere and the $2.8 million value of the cryptocurrency as reported by the feds now.

Other details Crain’s has asked about include: the date of the sale that yielded the $19.2 million; what platform was used to complete the transaction; where, exactly, the proceeds of the sale go; and whether feds are holding on to any other cryptocurrency at this time.

The date of the sale is interesting considering bitcoin’s recent plunge in price from highs earlier this year. Bitcoin is currently valued at just less than $33,500 a token, according to Coinbase. The cryptocurrency reached an all-time high in April of this year of more than $63,000 before a major slide in value in recent months.

Nonetheless, the DOJ said the return from the bitcoin sale represents the “largest net forfeiture in Northern District of Ohio’s history.”

Follow me on Twitter for more takes on finance, law, booze, cannabis and whatever else I’m thinking about.

You May Also Like

About the Author: Kate