United States federal sentencing guidelines suggested Shavers would spend three years in jail but the judge reduced the sentence because of the “honest work” the Texan has done since his arrest.
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Prosecutors said Shavers caused about half of 100 investors to lose all or part of their bitcoin investment from September 2011 to September 2012.
Shavers, who pleaded guilty in September 2015 to one count of securities fraud and who now supports himself as a cook, said in court he had “royally messed up”, and had lost friends and embarrassed his family as a result of his fraud.
“I don’t think this is something I’ll ever fully be able to get over, but I’m going to try to make things right”, Shavers said.
Furthermore, the 33-year-old Texan also received 3 years of supervised release while being ordered to pay a little over $1.2 million in forfeiture and the same amount again in restitution. He operated the business from his home, offering bitcoin-related investments through the internet.
U.S. Attorney Preet Bharara said in a release that Shavers promised investors “spectacular returns and personal guarantees, when all he was really doing was paying back old investors with new investors’ bitcoins”.
The case is U.S. v. Shavers, U.S. District Court, Southern District of New York, No. 15-cr-00157.
The decision puts to rest a case that began in July 2013 when Shavers was charged with defrauding investors through an investment service called Bitcoin Savings and Trust (BCS&T), which was later deemed to be a fraudulent ponzi scheme.
Prosecutors said Shavers also misappropriated bitcoins to purchase a used BMW M5 sedan, to buy have a $1,000 steakhouse dinner in Las Vegas and to go to spas and casinos. In the case of Bitcoin Savings and Trust, investors were promised a 7% weekly return. Preet Bharara, the United States Attorney for the Southern District of NY, said that Shavers fraudulently obtained approximately 146,000 Bitcoin in BCS&T investments, which amounted to approximately $807,380 based on the average price of Bitcoin over the duration of the scheme.
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In a separate civil action, the U.S. District Court for the Eastern District of Texas entered final judgment against both Shavers and BCS&T in September 2014, ordering him to pay over $40 million in disgorgement and prejudgment interest, and a civil penalty of $150,000 related to BCS&T.
