Monero lead maintainer arrested in US over alleged fraud in South Africa

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The former lead maintainer for Monero has been arrested in the United States at the request of the South African government, in connection with charges unrelated to his role at the digital currency project. Riccardo Paolo Spagni, better known as Fluffypony, is alleged to have committed corporate fraud while working for a South African tech company back in 2009.

According to court documents filed at the Middle District of Tennessee, Spagni was arrested in June through an arrest warrant issued by the court. This followed a request by a court in Cape Town, South Africa, that issued a similar arrest warrant for Spagni on April 19, 2021.

The court documents claim that Spagni was employed at Cape Cookies between October 2009 and June 2011 as its IT manager. As an employee of the South African tech firm, he allegedly intercepted invoices from another company, known as Ensync, for IT services it had supplied Cape Cookies.

“SPAGNI knowingly used false information to fabricate similar invoices purporting to be from Ensync, relying on details including this company’s Value Added Tax (VAT) number and bank account information. SPAGNI then inflated the prices for the goods and/or services,” according to the court documents.

"The accused has failed to appear twice for his court appearance and all efforts by the investigating officer to establish the whereabouts of the accused were futile." https://t.co/FNqOAnG7BS pic.twitter.com/fa1vvs6iPp

— Amy Castor (@ahcastor) August 2, 2021

‘Fluffypony’, who is also the founder of emoji username project Yat, would then submit the invoices to his employer and receive the payment on his bank accounts.

“This evidence indicates that SPAGNI received 1,453,561.47 South African Rand, or roughly $99,185, as a result of his efforts to defraud Cape Cookies,” the court states.

Spagni was first charged by the Western Cape Regional Court, Cape Town for fraud. He pleaded not guilty to these charges, and the trial against him commenced. He later failed to make an appearance in court for his trial and the South African authorities have been trying to locate him since. He would later be arrested in the U.S.—in Nashville on his way to Los Cabos, Mexico—and is now being held by the U.S. Marshals Service.

Spagni has, however, refuted the accusations against him. In a July 31 response, his legal team stated, “The government has misstated both the facts and the applicable law in this matter.” According to the court documents, he reportedly moved to New York openly to work with his U.S. companies more closely.

Spagni also attacked the government’s claim that granting him bail was impossible, claiming that “many courts around the world have found “special circumstances” sufficient to grant bail in extradition matters.”

On Twitter, Fluffypony addressed the matter, stating: “I am hoping to resolve this misunderstanding within a short while. In the meantime my business affairs will continue under the leadership of my partners.”

https://twitter.com/Spatzipantz/status/1422304460278276096

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