Bitqyck Owners Face 5-Year Sentence: Evasion Charges Spark Legal Battle

The U.S. Department of Justice (DOJ) announced Tuesday (October 12) that the founders of cryptocurrency company Bitqyck had admitted tax evasion.

Bruce Bise, 60, and Samuel Mendez, 65, were charged with tax evasion in August, with Bise pleading guilty on September 9 and Mendez on Tuesday morning. Citing defense documents, the DOJ states:

“Bise and Mendez confirm that Bitqyck raised approximately $ 24 million from over 13,000 investors. Instead of fulfilling their promises to investors, the defendants used the Bitqyck funds for personal expenses, including gambling, car purchases, luxury furniture, art and rent. “

“The defendants used new technology, defrauded investors, pocketed proceeds and hidden revenues from the Internal Revenue Service (IRS),” said acting US attorney Chad Meacham.

Bise and Mendez promoted Bitqy’s cryptocurrency “as a way to enrich people who missed Bitcoin,” noted the DOJ, adding that they were holding an ICO in 2016.

A white paper published on the Bitqyck website promises investors that each Bitqy token comes with 1/10 of the market share of Bitqyck’s common stock. However, Bise and Mendez admit that they never actually distributed shares to Bitqy token holders or embedded the shares in Ethereum smart contracts.

About nine months after Bitqy was launched, Bise and Mendez began marketing another token called Bitqym. They claim that buying Bitqym will allow investors to participate in “Bitcoin mining”. In reality, however, they admit that such a mining facility never existed.

In addition, Bise and Mendez fraudulently reported revenue to the IRS in 2016 and 2017. In 2018, Bitqyck did not file corporate tax returns despite collecting more than $ 3.5 million from investors. “The total amount of taxes that Bise and Mendez evaded was more than $ 1.6 million,” the DOJ announced.

“Bise and Mendez are now facing five years in federal prison.”

Bitqyck too agree “agreed to pay a $ 8.3 million fine to settle allegations that it misled investors and ran a digital asset exchange” with the US Securities and Exchange Commission (SEC). The DOJ added that as part of the settlement, Bise and Mendez “agreed to pay penalties and fines of $ 890.254 and $ 850.022, respectively.”

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