Federal prosecutors have appealed a sentence deemed 'unusually lenient' for Estonian nationals Sergei Potapenko and Ivan Turõgin, who orchestrated a $577 million cryptocurrency Ponzi scheme. The Ninth Circuit is being asked to review Judge Robert S. Lasnik's decision to grant the defendants time served, a mere three years of supervised release, and fines of $25,000 each, while prosecutors sought 10-year prison terms. Legal experts suggest the challenge will be an uphill battle, as the Ninth Circuit typically defers to a district judge's discretion. Judge Lasnik justified the leniency by citing potential immigration risks and systemic issues in the treatment of foreign defendants. The scheme, which defrauded approximately 440,000 victims, involved selling fake crypto mining contracts and using funds for luxury items instead of legitimate mining operations. Approximately $400 million has been seized for victim compensation as part of the lawyers' plea agreement. The case raises significant concerns regarding deterrence and consistency in sentencing for large financial fraud.

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