The former head of a crypto multi-level marketing scheme that first came to regulators’ attention back in early 2018 is now facing securities fraud charges in the U.S.

Horst Jicha, CEO of USI Tech Ltd., was arraigned Friday in a federal court in Brooklyn on charges of securities fraud, conspiracy to comment securities fraud, wire fraud and money laundering.

The charges have not been proven, and he is presumed innocent.

According to the indictment, USI Tech, which was touted as an online platform that made it easy for retail investors to invest in crypto and guaranteed high returns from crypto mining, was actually a multi-level marketing scheme that misled investors and ultimately resulted in investors losing an estimated US$150 million in Bitcoin and Ether.

It’s alleged the firm shut down operations in the U.S. and Canada in early 2018 amid growing regulatory scrutiny on both sides of the border.

In February 2018, the Ontario Securities Commission and Saskatchewan’s Financial and Consumer Affairs Authority both issued cease-trade orders against USI Tech, citing concerns that it was violating securities laws by trading without registration and issuing securities without a prospectus.

A couple of U.S. state regulators also secured emergency cease and desist orders against the firm, and various Canadian regulators issued investor alerts about the scheme.

In response, U.S. authorities allege the company ceased operations overnight, “leaving investors with no ability to access their money and resulting in millions of dollars in losses.”

They also allege US$94 million was diverted to crypto wallets controlled by Jicha, who hadn’t returned to the U.S. until he attempted to travel to Miami for a vacation on Dec. 23, 2023 — when he was arrested.

“Although the defendant did not return to the United States for half a decade, my office and the FBI worked to ensure that when he did, he would be brought to justice,” said Breon Peace, U.S. attorney for the Eastern District of New York, in a release.

In a statement provided to Marketwatch, attorneys for Jicha said: “It’s always difficult when investors have suffered losses at the hands of certain bad actors. We look forward to zealously defending the allegations against Mr. Jicha and bringing forth the facts of his involvement with USI Tech in hopes that the bad actors will be brought to justice.”