Spokane, Washington – On December 11, 2024, United States District Judge Thomas O. Rice sentenced Michael Joseph McElhiney, age 38, formerly of Spokane, Washington, to 41 months in federal prison in connection to cryptocurrency scheme where he defrauded investors of hundreds of thousands of dollars. Judge Rice also imposed 3 years of supervised release, $326,119.95 in restitution, and ordered McElhiney to be immediately remanded to the custody of the United States Marshals Service following the hearing.
According to court documents and information presented at sentencing, McElhiney defrauded investors by pretending to operate a cryptocurrency investment fund known as MAC Blockchain Solutions. As part of his scheme, which occurred between March 4, 2021, and September 10, 2022, 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 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 to invest his victims’ money and manage their investments for his victims’ benefit. For example, McElhiney promised certain returns on victims’ investments and always assured investors 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 also of 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 Blockchain Solutions had been the victims of theft; payment processing platforms had paused withdrawals; and there were other delays in processing withdrawals.
“Investors, trusting Mr. McElhiney with their money, art, and precious metals expected a safe return on their investment. Instead, Mr. McElhiney stole their money and used it for his own purposes. When investors asked for their money back, Mr. McElhiney lied to perpetuate the fraud, stated U.S. Attorney Waldref. “I’m devastated for the victims who suffered financial and emotional consequences of Mr. McElhiney’s scheme, and am grateful for the skilled investigators with Homeland Security Investigations and the Spokane Police Department and dedicated prosecutors in my office that uncovered this scheme and worked diligently to hold Mr. McElhiney accountable for his actions.”
“Today’s sentencing serves as a clear reminder that those who prey on the trust of others through fraudulent schemes will be held accountable,” said Matthew Murphy, acting Special Agent in Charge, HSI Seattle. “This individual exploited the allure of digital currency to deceive and steal from countless investors. We remain committed to investigating and prosecuting those who attempt to manipulate others for personal gain, regardless of the platform or technology they use. We appreciate the tireless work of our law enforcement partners and the U.S. Attorney’s Office to bring individuals like McElhiney to justice.”
This case was investigated by Homeland Security Investigations and the Spokane Police Department. It was prosecuted by Assistant United States Attorney Dan Fruchter.
U.S. Attorney Waldref released a video statement that can be found here.