INSUBCONTINENT EXCLUSIVE:
Federal prosecutors said Qin defrauded more than 100 people out of about $90 million.Stefan Qin's investors thought they'd found a sure
thing -- a hedge fund that was generating 500 per cent returns by exploiting the price gaps between cryptocurrencies on 40 exchanges
throughout the world.Instead, the 24-year-old self-proclaimed math whiz used their money on a lavish lifestyle, including a $23,000-a-month
Manhattan penthouse apartment, and failed investments in initial coin offerings and real estate
Federal prosecutors said Qin defrauded more than 100 people out of about $90 million.After some of his victims said Qin should spend as long
as possible behind bars for securities fraud, U.S
District Judge Valerie Caproni sentenced him Wednesday to seven and a half years and called him "a potentially very dangerous person."Mr Qin
"deliberately and consciously chose a path" to rip off investors, including fake account statements and lying to clients about how he was
using their money, Ms Caproni said
"This kind of white collar crime is just as devastating to victims as other types of crime, and it will be punished severely."The judge also
said the sentence was intended to discourage others from similar crimes and to protect the public from Mr Qin, who had no trouble lying to
his investors."Virgil had a stated market strategy of 'market neutral,' safe investments," Manhattan U.S
Attorney Audrey Strauss said in a statement
"Qin's investors soon discovered that his strategies weren't much more than a disguised means for him to embezzle and make unauthorized
investments with client funds."More than a dozen investors had written letters to the judge, including several who said they had lost their
life savings to Qin, an Australian national who dropped out of college to found Virgil Sigma Fund LP in 2017
One woman said she was left "homeless and destitute."Mr Qin told the judge he "felt absolutely heartbroken" to read the letters, many of
whom were family, friends or business associates.'I Feel Ashamed'"I feel ashamed to look them in the eye and tell them I'm sorry, but I
must," he said.Mr Qin had claimed he developed a special trading algorithm called Tenjin that could earn profits by buying a cryptocurrency
on one exchange and selling it at a higher price on another
Shortly after starting Virgil, he bragged the fund produced an annual return of 500 per cent in 2017
The Wall Street Journal wrote a profile of him in 2018, when he managed $23.5 million
By 2020, he'd raised more than $90 million.He said he started the hedge fund in his first year of college using an algorithm he thought was
an "amazing money making machine." But "things started to go south, people started to become suspicious of my promises," Mr Qin told the
judge."Instead of coming clean I did the worst thing and doubled down on my lies," Mr Qin said
"I thought I was the main protagonist and life was a video game and I had just found the cheat code to beat it
As we know life is not a video game."Near the end of last year, as losses mounted, investors started to demand their money back
To make those payments, Qin tried to raid another fund he had started, the VQR Multistrategy Fund LP, according to prosecutors
Securities and Exchange Commission in December got cryptocurrency exchanges to put a freeze on VQR's assets.After that, Mr Qin flew back to
from South Korea, surrendered to authorities in February and pleaded guilty the same day.While Mr Qin faced as much as 20 years in prison,
federal sentencing guidelines call for 151 to 188 months
Probation officials recommended 96 months, based on his lack of a criminal record and his voluntary return from overseas to face
charges.'Brazen' FraudProsecutors had urged "substantial" prison time given the "brazen nature" of Mr Qin's crime and the need to stop
discourage others from doing the same thing."Mr Qin used that hedge fund as his own piggy bank, stealing investor money to live a lavish
lifestyle and repeatedly lying to investors about what he was doing with their money," Assistant U.S
Attorney Daniel Tracer said in a sentencing memo.Defense lawyers asked for a sentence of 24 months, noting Qin took responsibility for his
actions and helped authorities to recover some of the lost money.One investor told the judge in a letter not to be swayed by Qin's personal
charm, a characteristic that helped him defraud so many."Mr
Qin did not steal food from a grocery to feed his family," said the investor, Steve Reich
"He stole over $90 million from ordinary people and has shown no genuine remorse."The case is U.S
District Court, Southern District of New York (Manhattan)(Except for the headline, this story has not been edited by TheIndianSubcontinent
staff and is published from a syndicated feed.)
