A federal grand jury has indicted Steven Drawdy, 39, of Grovetown, Ga., for allegedly defrauding more than 30 customers who paid him in cryptocurrency for computer equipment they never received.
A Georgia man is facing federal charges for running a cryptocurrency mining scam that netted him approximately $1 million from unsuspecting customers, according to the U.S. Attorney’s Office for the Southern District of Georgia.
Steven Drawdy, 39, of Grovetown, Ga., was indicted by a U.S. District Court grand jury on one count of Wire Fraud, which carries a maximum penalty of up to 20 years in prison, along with substantial financial penalties and restitution, and up to three years of supervised release upon completion of any prison term.
Drawdy Allegedly Took Crypto Payments for Nonexistent Computers
The indictment alleges that from about August 2021 through April 2022, Drawdy participated in an online cryptocurrency discussion forum and received cryptocurrency payments from at least 30 victims who believed they were ordering cryptocurrency “mining” computers from him.
Cryptocurrency mining uses specialized hardware and software to solve complex mathematical problems and verify transactions on a blockchain network, such as Bitcoin or Ethereum.
Miners are rewarded with newly generated coins or transaction fees for their work.
However, Drawdy allegedly never delivered the computer equipment to the customers and instead kept their cryptocurrency payments for himself.
The indictment further alleges that after receiving the payments, Drawdy would eventually stop communicating with the customers or offer them a partial refund but require them to pay a fee to receive it – and then provide neither the refund nor the computer.
FBI Seeks More Victims of the Scheme
The case is being investigated by the FBI and prosecuted by Assistant U.S. Attorney Jennifer A. Stanley.
The FBI is asking anyone who might have been a victim of the scheme to call 706-722-3702.
“Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty,” the U.S. Attorney’s Office said in a press release.
The case is one of many examples of how scammers exploit cryptocurrency’s growing popularity and complexity to defraud unsuspecting investors and consumers.
Crypto crime losses hit $4.5 billion in 2021, more than double from 2020, says CipherTrace. Chainalysis says crypto crime share was only 0.24% of total crypto activity in 2023.
To avoid falling victim to such scams, consumers should always do their own research before investing in or purchasing any cryptocurrency-related products or services and verify the legitimacy and reputation of the sellers or providers.
Additionally, they should be wary of any offers that sound too good or require upfront payments or fees.
