New York federal prosecutors announced on Friday that Philip Reichenthal, a disbarred attorney, pled guilty to conspiracy to commit wire fraud, in connection with a scheme to defraud investors who believed they were buying Bitcoin.
Reichenthal falsely represented that he would act as an escrow agent for the transactions. He engaged with Randy Craig Levine, an international fugitive and former Coral Springs resident, in executing the deals. In their schemes, Levine fraudulently induced victims to send millions of dollars to Reichenthal, who was a licensed attorney at the time of the fraudulent activities.
According to a Justice Department press release, between June and July of 2018, Levine persuaded the first victim, the head of a cryptocurrency escrow firm, Volantis Entities, to wire $3 million to Reichenthal to fund an over-the-counter desks Bitcoin buy. But instead of purchasing the Bitcoins for the client, Reichenthal wired over $2 million to a bank in Guatemala where Levine had an account. And no Bitcoins were purchased.
In a second charge between February and May of 2019, Levine and Reichenthal brokered another Bitcoin transaction deal that never materialized and therefore conned the second victim. The Florida Bitcoin investor sent Reichenthal $2 million to fund the purchase of his Bitcoins. Once again, Levine and his attorney did not purchase the Bitcoin for the investor. Reichenthal allegedly wired $1.9 million of the funds to bank accounts in Mexico controlled by Levine.
Reichenthal was arrested on September 14, 2020, and pleaded guilty on Friday, February 11 2021 before U.S. Magistrate Judge Debra Freeman. Reichenthal was charged and received a twenty-year prison sentence.
While making the ruling, U.S. Attorney Damian Williams, said: “As a licensed attorney and escrow agent, Philip Reichenthal was entrusted to keep investors money safe. But as he admitted today, he betrayed that trust by siphoning millions of dollars of investor money. Now he stands guilty of wire fraud and awaits sentencing for his crime.”