Connecticut Man Pleads Guilty to $1.1M Crypto Fraud Lost on Stake.com

October 21, 2026

A 25-year-old from Wolcott, Connecticut, admitted taking about $1.1 million from more than ten crypto "investors" and gambling it away on Stake.com. He faces up to 65 years at sentencing in January.

A 25-year-old man from Wolcott, Connecticut, has admitted taking around $1.1 million from more than ten people who believed they were investing in cryptocurrency — and gambling the money away on the offshore casino Stake.com. The former college basketball player, identified in reports as E.R., pleaded guilty to federal fraud and money laundering charges on Monday, 19 October, and now faces sentencing in January.

Guilty plea in Bridgeport

The plea was entered in federal court in Bridgeport before US District Judge Kari A. Dooley, according to the US Attorney’s Office for the District of Connecticut. The defendant admitted two counts of wire fraud, one count of international money laundering and one count of making a false statement to agents of IRS Criminal Investigation.

It is a significant turnaround from earlier this year. After his arrest on 12 February 2026, he appeared in federal court in Hartford before Magistrate Judge Thomas O. Farris and pleaded not guilty to every count. At the time, a federal grand jury had charged him with 21 offences: seven counts of wire fraud, eleven counts of international money laundering and three counts of making false statements. Under the plea, he has admitted four of them.

He remains free on a $500,000 bond until sentencing, which is scheduled for 11 January 2027.

How the scheme worked

According to federal authorities, the fraud ran for almost four years, from May 2021 to March 2025. During that time, the defendant presented himself as a successful cryptocurrency investor capable of generating large returns from trading digital assets. The pitch worked: he attracted substantial sums from several wealthy investors.

To make the operation sound more credible, he claimed to be part of a team run by a mysterious figure known as “The Chef”, who supposedly decided how and when investors would receive their profits. It remains unclear whether any such person ever existed.

Once the money arrived, investors were told that their accounts had grown substantially. But there was a catch: before they could withdraw anything, they had to pay additional charges, which he described as “gas fees”. Gas fees are a real feature of cryptocurrency networks — the transaction costs paid to process transfers on a blockchain — but prosecutors said he used the term purely as a pretext to extract more money from his victims.

Where the money really went

Investigators found that none of the money was invested in cryptocurrency as promised. Instead, it was transferred to Stake.com, an offshore online gambling platform. According to prosecutors, the defendant used Stake to hold the funds, to generate cryptocurrency addresses to which victims sent Bitcoin, and to make occasional large payments back to investors.

Those payments are known in fraud cases as “lulling payments”. They are designed to reassure victims that their investment is real and to delay the moment they start asking questions — buying the fraudster more time while the rest of the money disappears. In this case, prosecutors said, that money was gambled away.

His reported gambling losses on the platform totalled $1,159,945, all of it traced back to more than ten victims. That figure is higher than the roughly $950,000 prosecutors estimated when the indictment was first reported in February.

The fraud also began while he was still playing college basketball. He made 31 appearances for his university team between 2019 and 2023, before the scheme was finally uncovered.

Lying to the IRS

The case also includes a charge of lying to federal agents. During an interview with IRS Criminal Investigation in September 2023, the defendant made several false statements. According to the original indictment, he denied that he was still using an offshore gambling platform and claimed that another man, whom he called “Greg”, had doubled the investors’ money. Investigators determined that “Greg” did not exist.

Timeline of the case

What sentence could he face?

The charges themselves reflect the different stages of the scheme. Wire fraud is the federal offence of using electronic communications — emails, messages, online transfers — to carry out a plan to cheat people out of money, which covers the false promises and fake fee demands made to investors. International money laundering relates to moving the proceeds of crime across borders; here, prosecutors linked it to the transfer of victims’ funds to an offshore gambling platform. The false statement count stems from the misleading answers given to IRS agents in 2023, including the invented “Greg”.

The four counts carry a combined maximum potential sentence of 65 years in prison. In practice, sentences in federal fraud cases are usually far lower than the statutory maximum, and the final decision will rest with the court after considering the circumstances of the case.

Why the case matters for players

The case is a reminder of how online gambling and cryptocurrency can overlap in fraud schemes. Crypto-friendly offshore casinos allow large sums to move quickly, and in this case prosecutors say the platform was used not only to gamble, but also to receive victims’ Bitcoin and make the lulling payments that kept the scheme alive.

For players and would-be investors, the lessons are simple:

• Be wary of guaranteed returns: anyone promising large, reliable profits from crypto trading should be treated with caution.
• Watch out for withdrawal fees: being asked to pay more money before you can access your “profits” is a classic warning sign.
• Verify who you are dealing with: unnamed partners such as “The Chef” or “Greg” are impossible to check — and that is often the point.
• Stick to licensed operators: regulated gambling sites are subject to anti-money-laundering checks that offshore platforms may not apply as strictly.

Written by Oliver Bennett