(Spokane, WA) – Vanessa R. Waldref, United States Attorney for the Eastern District of Washington, announced today that Michael Joseph McElhiney, age 37, formerly of Spokane, Washington, pleaded guilty to Wire Fraud. United States District Judge Thomas O. Rice accepted McElhiney’s guilty plea and scheduled a sentencing hearing for September 25, 2024, in Spokane, Washington.
In the plea agreement accepted by the court, and in information disclosed during court proceedings, between March 4, 2021, and September 10, 2022, McElhiney defrauded investors by pretending to operate a cryptocurrency investment fund known as MAC Blockchain Solutions. McElhiney promised prospective investors that he and his purported business partners ran a successful cryptocurrency investment fund that invested in emerging cryptocurrencies and other blockchain-based projects, such as Ethereum staking and cryptocurrency liquidity pools.
McElhiney typically contacted his victims in person. For example, he solicited individuals working as Uber drivers whom he met while taking Uber rides in their vehicles, as well as women whom he met through dating apps. McElhiney also met victims online while playing the video game “Call of Duty” under the username “Bing Bong.” McElhiney often met with victims several times and developed personal relationships with them before successfully soliciting and receiving funds.
McElhiney promised that he would invest funds provided by investors and manage those investments for the benefit of his clients. McElhiney promised guaranteed or variable returns depending on the supposed investment vehicle and always promised investors that they could liquidate their investments and get their money back at any time. McElhiney then sent investors information using a platform called Coin.FYI that purported to track the progress of their investments. In actuality, McElhiney never invested the funds provided by investors, but instead kept the funds for his own personal use, specifically to gamble at casinos, among other purposes. The purported Coin.FYI accounts that McElhiney showed investors did not correspond to any actual investment funds but instead were fabricated figures intended to convince investors that McElhiney had invested their funds and that the investments were appreciating in value.
McElhiney defrauded investors of more than $350,000 in this manner, including defrauding investors not only of cash but rare art and precious metals.
McElhiney continued to falsely and fraudulently represent to victims that their assets had been invested in a cryptocurrency fund when victims sought to remove their assets from the “fund.” McElhiney falsely and fraudulently represented that he could not timely return victims’ assets because, among other reasons: MAC Solutions had experienced security breaches; McElhiney was out of the country and unable to facilitate withdrawals; McElhiney and MAC Solutions had been the victims of theft; payment processing platforms had paused withdrawals; and there were other delays in processing withdrawals.
U.S. Attorney Waldref stated that no matter the means or the method, fraudsters will be held accountable. “Mr. McElhiney’s scheme involved a new form of digital currency, but his goal was old as time – to separate his victims from their money. My heart goes out to the victims who were defrauded out of their hard-earned money that they needed to take care of themselves and their loved ones. I want to especially applaud Homeland Security Investigations and Spokane Police Department, who both did an incredible job investigating this case and identifying victims of Mr. McElhiney’s fraud. My office will continue to work with our law enforcement partners to vigorously prosecute fraudsters who take advantage of innocent victims in order to enrich themselves.”
“Fraud involving cryptocurrency is particularly concerning as it can be difficult to trace and recover stolen funds, financially devasting victims while eroding trust in digital financial systems,” said Special Agent in Charge Robert Hammer, who oversees HSI operations in the Pacific Northwest. “Fortunately, HSI agents in partnership with the Spokane Police Department, were able to prevent this fraudster from taking advantage of more victims.”
This case was investigated by Homeland Security Investigations and the Spokane Police Department. It is being prosecuted by Assistant United States Attorney Dan Fruchter.