Spokane Man Sentenced to Over 3 Years for Cryptocurrency Fraud: A Cautionary Tale

Spokane Man Sentenced for Cryptocurrency Fraud

Michael McElhiney has been sentenced to over three years in federal prison for defrauding investors by falsely operating a cryptocurrency investment fund.

United States District Judge Thomas O. Rice announced the sentence on Wednesday, revealing that McElhiney defrauded investors of more than $350,000. In addition to his prison term, he faces three years of supervised release and must pay $326,119.95 in restitution.

The Scheme

McElhiney claimed to run a cryptocurrency investment fund named MAC Blockchain Solutions, promising investors lucrative returns from emerging cryptocurrencies, Ethereum staking, and liquidity pools.

Between March 2021 and September 2022, he solicited individuals, often targeting Uber drivers and women he met through dating apps. McElhiney even engaged with victims while playing Call of Duty, developing personal relationships before soliciting funds.

False Promises and Deception

Promising to manage investments for his victims, he assured them they could liquidate their investments whenever they wished. He used a platform called Coin.FYI to show fake investment progress, but he never actually invested the funds. Instead, he used the money for personal expenses, defrauding victims of cash, rare art, and precious metals.

U.S. Attorney Waldref expressed concern for the victims who suffered financial and emotional consequences due to McElhiney’s actions, stating, “Investors trusted Mr. McElhiney with their money, art, and precious metals expecting a safe return.”

The Aftermath

When victims sought to withdraw their investments, McElhiney fabricated stories about security breaches and thefts to delay returns.

“Today’s sentencing serves as a clear reminder that those who prey on the trust of others through fraudulent schemes will be held accountable,” said Matthew Murphy, acting Special Agent in Charge, HSI Seattle.

This case was investigated by Homeland Security Investigations and the Spokane Police Department, and prosecuted by Assistant United States Attorney Dan Fruchter.