SPRINGDALE, Ark. — A Springdale man pleaded guilty on Monday, Aug. 12, of convincing a Michigan man to invest Bitcoin with him and using it to gamble online instead.
Kolin Deshazo was first investigated in Dec. 2019 by the Springdale Police Department, who received reports of him operating a cryptocurrency investment scam.
Beginning as early as June 2019, federal authorities found that Deshazo made claims on social media that he'd developed an artificial intelligence "bot" that could trade cryptocurrency and yield high returns. When people would transfer their cryptocurrency to Deshazo, however, there wasn't a bot at all and he'd take the money for himself. He claimed the "bot" made automated trades that would make a lot of money quickly.
According to Deshazo's plea agreement with federal authorities, he lied to these victims knowingly and never had intentions on investing their money. One Michigan victim told the FBI that Deshazo scammed him out of several thousands of dollars worth of cryptocurrency. This victim had heard through a friend that Deshazo "operated a crypto investment group" on the social media app Telegram.
The man messaged Deshazo on Telegram, who said he'd developed this AI bot that could "quadruple his return within a year."
The plea agreement says the man from Michigan, who was only identified in court documents with the initials K.S., transferred $9,000 worth of crypto to Deshazo to be utilized by Deshazo's "bot."
At that time, Deshazo was in Springdale.
"It was further determined that no trading application or bot was ever attached to the wallet ... in which K.S. transferred his bitcoin," federal authorities said in Deshazo's plea agreement.
Deshazo agreed to plead guilty to one count of wire fraud.
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