Alleged BitClub fraud scheme involves Utah businesses – Deseret News

Alleged BitClub fraud scheme involves Utah businesses – Deseret News

Blockchain Crypto Market Technology
September 8, 2022 by Coinvasity
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Eric S. PetersonI-15 and Silicon Slopes area in Lehi on Wednesday, Aug. 17, 2022.Scott G Winterton, Deseret News The following story was reported by The Utah Investigative Journalism Project in partnership with the Deseret News.A suspected fraudulent bitcoin mining company may have ensnared several Utah properties, according to documents from a case against the BitClub
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Eric S. Peterson
I-15 and Silicon Slopes area in Lehi on Wednesday, Aug. 17, 2022.
Scott G Winterton, Deseret News

The following story was reported by The Utah Investigative Journalism Project in partnership with the Deseret News.
A suspected fraudulent bitcoin mining company may have ensnared several Utah properties, according to documents from a case against the BitClub Network, a company accused by the Department of Justice of defrauding over a thousand investors out of $722 million from 2014 to 2019. 
Federal authorities want to seize $22 million from properties in Utah that received investments involved in the alleged BitClub scheme, including $500,000 in Evermore Park, an immersive theme park in Pleasant Grove, $1.6 million in The Grid, another Utah County attraction billed as one of the longest indoor go-kart tracks in the world, and $8.4 million in Kiln, a tech-focused co-working space with offices in Lehi and Salt Lake City. 
How did money from a cryptocurrency company being prosecuted in New Jersey get into Utah businesses? 
Court documents trace a path of how the investments received by the Utah-based companies — none of which responded to multiple requests for comment — were sent through the BitClub Network into BitWealth Investments and BitWealth Holdings, companies connected to a local entrepreneur: Gavin Dickson. A Utah business owner, Dickson is not charged in the case but appears in court documents stating he invested money from BitClub through some of his companies.
Dickson is an entrepreneur who was applauded for opening three restaurants during the pandemic. He bought — and later sold — Fremont Island in the Great Salt Lake. Those businesses are not named in federal filings on BitClub.
The Justice Department in a federal indictment has accused BitClub Network of operating “a worldwide fraudulent scheme that solicited money from investors in exchange for shares of pooled investments in cryptocurrency.” Alleged victims believed they were investing in pooled shares of bitcoin mining but were instead allegedly feeding millions into a fraud propped up by slick marketing and deceptive algorithms, according to a 2019 indictment filed against BitClub Network and its founders.
The lead defendant in the case, Matthew Brent Goettsche, who was indicted in the District of New Jersey, told one of his partners the business would make them rich “off the backs of idiots,” according to court documents. 
The indictment spells out messages from Goettsche instructing his software developing partner to create false mining earnings to entice early investors, making sure that the early payout numbers look “inconsistent” so they wouldn’t be perceived as manipulated. In one message he described their target audience as the “typical dumb MLM investor.” 
Goettsche also created multiple companies to put profits from BitClub into “above board investments.”
Money from the alleged scheme ended up in Utah through at least one company, BitWealth Holdings, a business entity identified in court filings as having allegedly used funds from the crypto scheme and that lists Dickson as an owner.
Dickson did not respond to numerous requests for comment made over the phone, at his office and through his attorney.
Since the creation of Bitwealth Holdings, Dickson’s name began popping up more and more in Utah financial circles.
Gavin Dickson has been heralded as a daring business genius, a “serial entrepreneur” wunderkind who got his start as a teenager hustling up courtside Jazz tickets for visiting business titans, executives and gurus like Tony Robbins so he could sit beside them and network during games.
According to an interview on the Living Unscripted podcast, sponsored by a company he was an investor in, Dickson said he lost a fortune in real estate after the 2009 recession and then climbed back on top to eventually manage a $50 million venture capital fund in 2017.  
It’s a classic rags-to-riches-to-rags-to-riches story, told by Dickson and through his bio pages on the companies he’s started or invested in.
Dickson first started garnering news in 2018 when he bought Fremont Island in the Great Salt Lake in partnership with the monster truck-loving stars of “The Diesel Brothers” television show, with plans to develop the island.
In a 2018 Instagram post, Dickson wrote about the purchase and how he and his “partner and new good friend” David “Heavy D” Sparks from the TV show had “big things coming!!” with hashtags like #BitWealth and #DreamBIGDreams.
Permitting problems led Dickson and his partners to sell the island to a conservation group in 2020.
At the start of the pandemic, Dickson then helped co-found Utah Pay it Forward, a philanthropic organization that took donations to buy restaurant gift cards to donate to needy families. Dickson was featured on news programs touting the charitable endeavor.
But before he was buying islands or publicizing his philanthropic efforts, Dickson had already become well known in Utah’s burgeoning tech community for his startup investments, especially in Kiln, a tech-focused co-working space that has offices in Lehi, Salt Lake City and Park City.
“We love Kiln, they do a lot of stuff for our community,” said Clint Betts, CEO and cofounder of Silicon Slopes.
He says the venue has hosted numerous tech forums, retreats and even an afterparty for the most recent Silicon Slopes Tech Summit. Federal filings show BitWealth Investment put $8.4 million into Kiln, and Dickson has taken credit for the investments at public events.
On Dickson’s social media feeds he has often pointed to his networking with celebrities and important individuals, posing with Tony Robbins at a Jazz game, or taking his daughter to the White House Easter Egg Roll in 2019 where she is pictured with then-first lady Melania Trump.
On Dec. 9, 2019 Dickson hosted Utah Attorney General Sean Reyes at The Grid, another investment federal documents said was made with funds from the BitClub Network scheme. The venue is a massive indoor go-karting track where Dickson joked about beating Reyes in a friendly race. A tech forum was also hosted at the Kiln space in Lehi with different tech CEOs and Reyes as panelists.
In an Instagram post about the December 2019 tech forum, Dickson referred to Reyes as a “great friend, great guy!!”
The Utah Investigative Journalism Project sought for weeks to arrange an interview with Reyes about his relationship with Dickson, but the state attorney general did not grant an interview. Reyes’ campaign manager Alan Crooks said Dickson did not donate to the campaign and that Reyes was at the event just to speak about “the AG’s role in weeding out bad actors in the (tech) industry.”
When asked how Reyes knew Dickson, Crooks said: “I think that’s basically one of the first times (Reyes) met him,” in reference to the tech forum at Kiln.
The office also did not respond to written follow-up questions asking whether Reyes was aware of the BitClub case, and if Dickson had donated to Reyes’ anti-human trafficking nonprofit, the LAVA (Liberate All, Value All) Foundation.
The Utah Attorney General’s office has stated that it has “no responsive records” for any state investigations or complaints into Dickson or his business entities.
The new owners of Dickson’s former Bountiful mansion (which he bought from former Utah Jazz player Derrick Favors) said they knew nothing about Dickson but said four FBI agents showed up last year asking about his whereabouts.
A search warrant application in the BitClub case filed for Goettsche’s home in Lafayette, Colorado, also named Dickson in describing how Goettsche allegedly transferred and hid assets from the BitClub operation.
“The investigation further revealed that Goettsche received funds that originated from (BitClub Network) from accounts maintained by Gavin Dickson — and Most Amazing Box LLC,” the document reads.
Most Amazing Box is a Dickson-formed LLC.
Another filing from February 2020, sought to prevent Goettsche from being released from custody, calling him a flight risk because of his vast access to still unrecovered crypto assets, including a private plane alleged “to have been purchased from an account in the name of Most Amazing Box LLC, which appears, in turn, to be funded by a Singapore-based cryptocurrency trading exchange,” the filing states. At the end of 2020, Goettsche was released and placed on house arrest with an ankle monitor until the trial.
The filing has identified 1,500 victims so far and quoted a customer service complaint from one individual writing from the African nation of Cameroon.
“U shall rot in hell for the amount of people you rendered homeless and (frustrated),” the alleged victim stated.
In March, the Department of Justice announced that Gordon Beckstead, a Nevada accountant, pleaded guilty to money laundering and preparing a false tax return to help Goettsche launder money from the BitClub scheme and avoid paying more than $20 million in federal income taxes.
No trial has been set in the case against Goettsche and BitClub Network.

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