A federal grand jury in the District of Oregon has returned indictments against the people believed to have masterminded the “global Ponzi” scam known as Forsage, which is said to have generated $340 million.

According to a statement issued by the Department of Justice (DOJ) on February 22, the four Russian founders, Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev and Sergey Maslakov, were indicted for having key roles in the scheme that raised approximately $340 million from victim-investors. This information comes from the indictment.

United States Attorney Natalie Wight of the District of Oregon stated that “today’s indictment is the result of a rigorous investigation that spent months piecing together the systematic theft of hundreds of millions of dollars.” She also stated that “filing charges against foreign actors who used new technology to commit fraud in an emerging financial market is a complicated endeavor that is only possible with full and complete coordination of multiple law enforcement agencies.”

Forsage was promoted as a low-risk decentralized financial platform that was based on the Ethereum blockchain and offered clients the opportunity to generate long-term passive income. Blockchain analysis, on the other hand, reportedly showed that eighty percent of Forsage “investors” got back less money than they had initially put in.

Analysis of the smart contracts, as reported by the Department of Justice (DOJ), indicated that money raised when new investors bought “slots” in Forsage smart contracts was diverted to older investors, which is consistent with the definition of a “Ponzi scheme.”

Forsage has an active Twitter account, where they recently posted a thread stating that community members who participate in the “Ambassador Program” will be able to receive monthly incentives for doing certain activities. The tweet was posted on February 22.

The Securities and Exchange Commission filed charges of fraud and sale of unregistered securities against the company’s four founders and seven promoters on August 1. At the time, the acting head of the SEC’s Crypto and Cyber ​​Unit, Carolyn Welshhans, said: “Fraudsters can’t circumvent federal securities.” laws by focusing their schemes on smart contracts and blockchains.”

In 2020, the Philippine Securities and Exchange Commission also raised concerns about Forsage, indicating that it may be a Ponzi scheme. However, a month later, the platform was still the second most popular decentralized application (DApp) on the Ethereum blockchain.

When a prosecutor files criminal charges against an individual or group and accuses them of committing a crime, this is called a charge. However, a grand jury files an indictment if prosecutors are able to persuade a majority of the grand jury members that an indictment is warranted after investigation.

The use of grand juries is a widespread practice in the prosecution of major federal and state criminal offenses.