Two men from Orange County, California, have been sentenced to jail after stealing more than $1.9m from 2,000 investors via a cryptocurrency scam.
Dropil Inc was founded in 2017 and operated until 2020. Both scammers Jeremy McAlpine, 26, and Zachary Matar, 29, claimed the firm to be an investment management service and trading program.
During the company’s initial coin offering (ICO) in 2018, investors were encouraged to purchase Dropil’s native token DROP and promised access to “Dex”, an automated trading bot.
Dex was supposed to generate annual returns of up to 63% in DROP and distribute these returns just over every two weeks.
Investigators found that McAlpine and Matar created fake profitability reports and provided false sworn testimonies on the amount of money raised during the ICO and the number of investors involved.
In July 2021, both fraudsters pleaded guilty to civil securities violations filed by the SEC, alongside another defendant, Patrick O-Hara.
In August, the pair pleaded guilty again to one count of securities fraud each. But, according to the Department of Justice, both McAlpine and Matar were sentenced to federal prison on Monday, August 1.
While Matar is set to serve a two-and-a-half-year sentence, McAlpine faces three.