Man sentenced to prison for stealing $350,000 in cryptocurrency scheme

Dec. 11—A 38-year-old man who defrauded investors of more than $350,000 in a cryptocurrency scheme was sentenced Wednesday to more than three years in federal prison.

Michael J. McElhiney pleaded guilty to wire fraud in June before U.S. District Judge Thomas O. Rice sentenced him to 41 months in prison.

The U.S. Attorney’s Office — Eastern District of Washington said in a news release that between March 2021 and September 2022, McElhiney, formerly of Spokane, promised prospective investors he and his purported business partners ran a successful cryptocurrency investment fund, according to court documents and information presented at sentencing.

McElhiney solicited drivers he met on Uber rides, women he met through dating apps and people he met online playing the video game “Call of Duty” to invest in his fraudulent fund. McElhiney often met with victims several times and developed personal relationships with them before successfully soliciting and receiving funds.

He promised to invest the victims’ money and manage their investments, sending the investors information that purported to track the progress of their investments. The accounts McElhiney showed investors did not correspond to actual investment funds, but instead were fabricated figures intended to convince investors McElhiney invested their funds and the investments were appreciating in value.

McElhiney never invested the funds and kept the money for his personal use, including to gamble at casinos.

When victims wanted to remove their assets from the fake fund, McElhiney made up reasons for why he could not return them.

Rice imposed three years of supervised release and $326,119.95 in restitution.

“Investors, trusting Mr. McElhiney with their money, art, and precious metals expected a safe return on their investment,” U.S. Attorney Vanessa Waldref said in the release. “Instead, Mr. McElhiney stole their money and used it for his own purposes. When investors asked for their money back, Mr. McElhiney lied to perpetuate the fraud. I’m devastated for the victims who suffered financial and emotional consequences of Mr. McElhiney’s scheme, and am grateful for the skilled investigators with Homeland Security Investigations and the Spokane Police Department and dedicated prosecutors in my office that uncovered this scheme and worked diligently to hold Mr. McElhiney accountable for his actions.”