A Connecticut Court found Dylan Meissner, former vice president of finance at Delphi Digital, guilty of embezzling at least $4.5 million from the firm and sentenced him to four years in jail. The research firm said justice has been served.
According to the ruling given by Connecticut District Court Judge Michael P. Shea on December 17, Meissner will also refund $4.6M in restitution. The accused served as a senior vice president in charge of finance at Delphi Digital between October 2021 and November 2022, when the wire fraud offence was committed.
Meissner Worked Hard to Cover His Tracks
The press release from the Department of Justice stated that the restitution amount to be refunded to Delphi Digital includes the amount he stole in addition to an unpaid loan. Further, Judge Shea ordered that a two-year supervised release would follow the accused’s sentence.
Speaking to the media following the ruling that gave the accused a 4-year jail term, Delphi Digital co-founder and CEO Ani Lulla confirmed that Meissner had indeed stolen the company’s funds and “generally abused our trust in him as a friend and team member.”
According to Lulla, Delphi Digital extended a crypto-loan of 50 ETH to Meissner, amounting to about $192,000, which the accused had intended to use as a cover to avoid incurring further losses following crypto investments that never bore fruit.
However, despite failing to repay the loan, the judge observed that Meissner went on to siphon $4.5 million more from Delphi Digital. The accused tried to cover his tracks by entering false records into the company’s accounting records by diverting money meant for bonuses for the firm’s analysts.
Prosecutors had asked for a Stricter Sentence.
The prosecutors had sought a longer sentence for the accused, arguing that a stricter punishment of six to eight years would serve as a deterrent. They highlighted that Meissner had used a sustained and multi-faceted scheme to steal from Delphi Digital.
However, his defence team asked for a lighter sentence of 51 to 63 months, stating that Meissner struggled with substance abuse and his efforts to maintain sobriety.
The prosecutors said: “It suggests that the defendant was operating rationally, if wrongfully—he intended to use company money to recoup his losses and make money for himself, and then give the company back what he took once the market went up.”
The Case is Reminiscent of Bankman-Fried’s Trial
The 4-year jail term given to the former Delphi Digital employee is reminiscent of the jailing of former crypto tycoon Sam Bankman-Fried, currently serving a 25-year jail term, for what authorities described as among the biggest financial frauds in the history of the United States. In the case of Bankman-Fried, the jury convicted the founder of the crypto exchange FTX on seven counts of embezzlement, fraud, and criminal conspiracy following over four hours of deliberations.
Prosecutors in the Bankman-Fried case, once a shining star in the crypto space, accused SBF of embezzling over $10 billion by using customers’ funds to buy property, fund political campaigns, and make risky investments.
The 25-year jail term verdict followed a month-long trial that came a year after the cryptocurrency exchange had filed for bankruptcy after a spectacular collapse that stunned the financial markets and wiped off SBF’s fortune, estimated or be $26 billion. During the trial, SBF admitted to having made mistakes.
Conclusion
The case of Meissner receiving a 4-year jail term for stealing from Delphi Capital adds to a growing list of crypto company employees breaking their trust and stealing from their employers. For example, former NFT marketplace employee Nate Chastain was sentenced to three months in jail for the first-ever case of NFT insider trading. A former Coinbase employee, Ishan Wahi, was also given a two-year jail term for tipping off his brother to future cryptocurrency listings.
Frequently Asked Questions (FAQs)
Why has cryptocurrency fraud become such a problem?
Cryptocurrencies are still a new invention, and like all new asset classes with a big potential for high returns, there is always a risk of fraudsters trying to take advantage, even when it involves the people we should be trusting.
Who typically falls victim to these scams?
While most fraudsters go for individual investors, there have been increasing cases of company employees targeting customers’ funds. In most of these unfortunate cases, individuals who are meant to lead by example end up giving the industry a bad name.
