A reader showed up in the comments today with a link to a 2017 civil lawsuit filed against GladiaCoin and JetCoin.
I hadn’t heard of the case before so I went and looked it up.
Sure enough on July 18th, 2017, Plaintiff Gloria Jung Yun filed suit in Pennsylvania.
BitcoinsBrain is also a Ponzi scheme defendant but I haven’t come across it before.
BitcoinsBrain’s website appears to have been repurposed as a crypto spam site.
Defendants identified as “internet Ponzi scheme business owners” are
- Michael Johnson, an alleged resident of New York;
- William Duane Portillo, an alleged resident of California;
- Connie Portillo, an alleged resident of California who “enjoys the benefit of (her) husband’s internet Ponzi scheme business”;
- Antoinio Casas, an alleged resident of Florida;
- Satur Segade, an alleged resident of somewhere in the US and Colombian citizen; and
- Oscar Ismael, an alleged resident of somewhere in the US and citizen of Mexico.
Co-defendants named in the lawsuit are
- GoDaddy – alleged domain and hosting provider for GladiaCoin and TwiceCoin
- CloudFlare – alleged to have “provided IP addresses and worked with” GladiaCoin and TwiceCoin
- Facebook – allegedly used by individual defendants to promote Ponzi schemes
- AT&T – ISP allegedly used by TwiceCoin
- YouTube – used by defendants and alleged to have “information of the defendants”
- Yahoo – alleged to have provided email service to defendants
- DynaDot – alleged to have provide domain services to BitcoinsBrain
As alleged by Gloria Jung Yun, on a friend’s recommendation she invested bitcoin into GladiaCoin.
Plaintiff Yun decided to join with small bitcoin amount of 0.1 to witness the return of the coins as stated 2.2% daily.
Sure enough the bitcoins were accumulation [sic] to pay out as claimed by her friends.
Plaintiff Yun borrowed money to use for a few months and deposited total 4.8 coins to GladiaCoin.
Plaintiff Yun lost 1.3 coins (additional) by technical error at GladiaCoin by using wrong deposit digital key provided by GladiaCoin and one member told Jun to contact Mr. Portillo.
Mr. Portillo claimed to have contact with administration/tech support even though it was not listed on the website.
Yun received 0.2 bitcoin of total lost 1.3 bitcoins back at her bitcoin wallet.
Mr. Portillo was pretending to help the issues but did not return the rest 1.1 bitcoins.
Victim Jenia (Plaintiff’s sister) deposited 1.2 bitcoins right after Plaintiff Yun was receiving the bitcoins and she received total 0.3333333 before GladiaCoin shut down.
GladiaCoin was paying well as promised as stated in the website to gain trust.
Plaintiff Yun and others did not pay attention to no contact info was listed in the website since Mr. Portillo acted as bridge to the administration to GladiaCoin.
Mr Portillo was there as trust worthy for everybody’s support as top level Sponsor (top of the pyramid scheme).
GladiaCoin paid Plaintiff until May 18, 2018 but the accounts were down and nobody got paid for a few days.
GladiaCoin reopened on May 24th, 2017 and paid until June 3rd, 2017 and shut the accounts down for the second time.
On June 4th, 2017 GladiaCoin requested to pay 15% of the deposited amount as administration fee. No pay outs from this day forward.
Yun alleged Portillo deleted all his GladiaCoin social media marketing after the Ponzi scheme collapsed.
Yun didn’t invest in TwiceCoin but notes it was a clone of GladiaCoin, likely run by the same people.
She invested (and appears to have lost) 0.01 in BitcoinsBrain, on the recommendation of “a woman”.
Other than noting “Plaintiff Yun’s upline sponsor lost bitcoins through JetCoin”, I’m not sure why JetCoin is a named defendant.
Yun is suing defendants for
- intentional misleading, misrepresentation to scam for theft
- money laundering and
- “racketeering activities” (RICO)
She’s seeking what she invested in bitcoin, plus $1 million and $2 million in damages from each individual defendant and company respectively.
Looking at the case docket, on May 5th 2018 Yun was granted permission to serve pre-discovery subpoenas on GoDaddy, CloudFlare and AT&T.
The aim of the subpoenas was to “determine the names and addresses of the Defendants in this matter.”
GoDaddy filed a Motion to Dismiss on June 5th, 2019.
The motion was granted on January 6th, 2020, dismissing GoDaddy as a defendant.
On March 30th the court directed Plaintiff Yun to show cause as to why the case shouldn’t be dismissed for failure to prosecute.
On April 9th Yun filed a declaration, stating she “could not be able to meet the order of this Court.”
Yun claims GoDaddy offered to provide information on defendants but only if they were voluntarily dismissed from the lawsuit.
GoDaddy stated that they will provide information outside of the court if the lawsuit is dropped or they will not provide any information and will file motion to dismiss.
Plaintiff said that if defendants’ information were provided by GoDaddy, Plaintiff will dismiss GoDaddy from the lawsuit upon providing all information.
GoDaddy filed motion to dismiss anyway.
This Court granted the GoDaddy’s motion.
Since GoDaddy said that they can provide information outside of the lawsuit, Plaintiff did not objected this order.
GoDaddy failed to provide the information outside of the court after dismissal and Plaintiff has difficulty finding the Defendants where about.
On August 21st, 2020, the court directed the U.S. Marshal to serve defendants Michael Johnson, Connie Portillo, William Portillo, CloudFlare, Facebook, AT&T, YouTube, Dynadot and Dancom.
Dancom isn’t mentioned in the original complaint so I’m not sure where they came from.
Yun was given 100 days to provide address details for the remaining defendants.
Between August 2020 and now there’s no indication on the case docket that Yun has provided additional addresses.
The USM has recorded successful service against Cloudflare, Facebook and Michael Johnson.
The last case docket entry is January 19th, 2021, pertaining to service on Johnson.
Personally I don’t think this case is going to go anywhere. It’s a good lesson in why you shouldn’t hand over cryptocurrency to randoms over the internet though.
I’ve added Yun’s case to our case calendar. I’ll continue to monitor the docket for updates.