BitClub fraud operators seek jail release over coronavirus fears

Two men being detained in connection with an alleged $722 million BitClub digital currency fraud have asked to be released from prison, amid concerns about the possible impact of coronavirus on their health.

Attorneys for Matthew Goettsche and Jobadiah Weeks submitted emergency motions for release before the U.S. District Court in New Jersey, arguing for a temporary release. In the motion, the accused argue their chances of contracting coronavirus are higher in an enclosed jail setting than would otherwise be the case.

In a letter to the court, Goettsche said the conditions of pretrial detention had been demonstrated to foster the spread of contagious disease:

“While the harsh realities of COVID-19 affect the world at large, the risks presented by the virus are particularly acute for inmates. Conditions of pretrial confinement have proven time and time again to create the ideal environment for the transmission of contagious disease.”

The pair are awaiting trial for their involvement in BitClub Network, which law enforcement have described as a Ponzi scheme. The scheme claimed to be a mining pool operating multiple different mining centers, founded back in 2014. Authorities charged the pair with falsifying earnings, which allowed them to solicit some $722 million from unsuspecting victims.

Lured by the promise of undeliverable returns, those affected were ultimately defrauded from their money, according to the indictment, resulting in charges of committing wire fraud and conspiracy to offer unregistered securities.

In submissions to the court, the duo said hand sanitizer was a controlled substance inside prisons, making it impossible to follow official health guidelines over the outbreak. Further, they said the close contact between prisoners, plus an “exceptionally poor record of maintaining detainee health” meant they should be temporarily released.

The pair argued that as the charges did not relate to violent crimes, they would pose no risk to the public, and were unlikely to flee justice having already surrendered their passports.

While the motion will be considered by the court, it is unlikely to find support from the victims of the scheme, many of whom remain out of pocket from their investment in BitClub Network.