Connecticut man pleads guilty to $1.16m crypto fraud

A Connecticut man has admitted running a fake cryptocurrency investment scheme and gambling his victims' money away on Stake.com. Elmin Redzepagic, 25, of Wolcott, pleaded guilty on 19 October 2026 before US District Judge Kari A. Dooley in Bridgeport, the US Attorney's Office for the District of Connecticut said. Net losses come to $1,159,945.34 across more than 10 victims.

How the scheme worked

According to court documents and statements in court, from about May 2021 to March 2025 Redzepagic presented himself as a crypto investor who earned high returns. Once victims had invested, he told them they had made a large profit but had to pay extra "gas fees" before they could withdraw it. He said he worked with a team led by someone called "The Chef", who supposedly decided who got paid, how and when.

He never invested the money. Instead, prosecutors say, he used Stake.com, which the release describes as "an offshore gambling platform", to receive and hold the proceeds, to generate crypto addresses for victims to send Bitcoin to, and to make large "lulling" payments to victims along the way. Lulling payments, in our words, are payouts made to victims to keep them confident in the scheme. He then lost the funds gambling on the site.

Stake.com is not a party to the case.

The charges and what comes next

Redzepagic pleaded guilty to two counts of wire fraud, one count of international money laundering and one count of making a false statement to IRS Criminal Investigation agents, to whom he made several false statements in an interview in September 2023. Wire fraud and international money laundering each carry a maximum of 20 years in prison per count; the false statement carries up to five years. Those are statutory maximums, not the expected sentence. Sentencing is set for 11 January 2027.

He was arrested on 12 February 2026 and is free on a $500,000 bond until sentencing. IRS Criminal Investigation ran the investigation.

The warning sign in this case

The "you have a profit, but pay a fee first to withdraw it" line is a common pattern in investment scams. Being asked to send fresh money before you can withdraw a balance you supposedly already have is a reason to stop, not to pay. The case also shows why crypto deposit addresses tell you little about who controls the money behind them: here, the addresses victims paid into were generated on a gambling site.

The FATF's September report on gaming and gambling ranks online casinos and sports betting among the highest money-laundering exposures. Polymarket US, by contrast, dropped its same-source withdrawal rule after a stolen-card wave, the WSJ reported.