Alleged BitClub fraud scheme involves Utah businesses

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The fol­low­ing sto­ry was report­ed by The Utah Inves­tiga­tive Jour­nal­ism Project in part­ner­ship with the Deseret News.

A sus­pect­ed fraud­u­lent bit­coin min­ing com­pa­ny may have ensnared sev­er­al Utah prop­er­ties, accord­ing to doc­u­ments from a case against the Bit­Club Net­work, a com­pa­ny accused by the Depart­ment of Jus­tice of defraud­ing over a thou­sand investors out of $722 mil­lion from 2014 to 2019. 

Fed­er­al author­i­ties want to seize $22 mil­lion from com­pa­nies in Utah that received invest­ments involved in the alleged Bit­Club scheme, includ­ing $500,000 in Ever­more Park, an immer­sive theme park in Pleas­ant Grove, $1.6 mil­lion in The Grid, anoth­er Utah Coun­ty attrac­tion billed as one of the longest indoor go-kart tracks in the world, and $8.4 mil­lion in Kiln, a tech-focused co-work­ing space with offices in Lehi and Salt Lake City. 

How did mon­ey from a cryp­tocur­ren­cy com­pa­ny being pros­e­cut­ed in New Jer­sey get into Utah businesses? 

Court doc­u­ments trace a path of how the invest­ments received by the Utah-based com­pa­nies — none of which respond­ed to mul­ti­ple requests for com­ment before this sto­ry was pub­lished — were sent through the Bit­Club Net­work into BitWealth Invest­ments and BitWealth Hold­ings, com­pa­nies con­nect­ed to a local entre­pre­neur: Gavin Dick­son. A Utah busi­ness own­er, Dick­son is not charged in the case but appears in court doc­u­ments stat­ing he invest­ed mon­ey from Bit­Club through some of his companies.

Dick­son is an entre­pre­neur who was applaud­ed for open­ing three restau­rants dur­ing the pan­dem­ic. He bought — and lat­er sold — Fre­mont Island in the Great Salt Lake. Those busi­ness­es are not named in fed­er­al fil­ings on BitClub.

The Jus­tice Depart­ment in a fed­er­al indict­ment has accused Bit­Club Net­work of oper­at­ing “a world­wide fraud­u­lent scheme that solicit­ed mon­ey from investors in exchange for shares of pooled invest­ments in cryp­tocur­ren­cy.” Alleged vic­tims believed they were invest­ing in pooled shares of bit­coin min­ing but were instead alleged­ly feed­ing mil­lions into a fraud propped up by slick mar­ket­ing and decep­tive algo­rithms, accord­ing to a 2019 indict­ment filed against Bit­Club Net­work and its founders.

The lead defen­dant in the case, Matthew Brent Goettsche, who was indict­ed in the Dis­trict of New Jer­sey, told one of his part­ners the busi­ness would make them rich “off the backs of idiots,” accord­ing to court documents. 

The indict­ment spells out mes­sages from Goettsche instruct­ing his soft­ware devel­op­ing part­ner to cre­ate false min­ing earn­ings to entice ear­ly investors, mak­ing sure that the ear­ly pay­out num­bers look “incon­sis­tent” so they wouldn’t be per­ceived as manip­u­lat­ed. In one mes­sage he described their tar­get audi­ence as the “typ­i­cal dumb MLM investor.” 

Goettsche also cre­at­ed mul­ti­ple com­pa­nies to put prof­its from Bit­Club into “above board investments.”

Mon­ey from the alleged scheme end­ed up in Utah through at least one com­pa­ny, BitWealth Hold­ings, a busi­ness enti­ty iden­ti­fied in court fil­ings as hav­ing alleged­ly used funds from the cryp­to scheme and that lists Dick­son as an owner.

Dick­son did not respond to numer­ous requests for com­ment made over the phone, at his office and through his attorney.

In a writ­ten state­ment to the Deseret News and Utah Inves­tiga­tive Jour­nal­ism project after this sto­ry pub­lished, Kiln said:

“In 2018 Kiln received an invest­ment from BitWealth. We are aware that Mr. Goettsche, who invest­ed in BitWealth, has been indict­ed for his involve­ment in a sep­a­rate, unre­lat­ed, busi­ness called BitClub. 

Kiln has nev­er had any involve­ment with or received any fund­ing from Bit­Club. BitWealth holds only a minor­i­ty equi­ty posi­tion in Kiln. 

The case against Mr. Goettsche and Bit­Club is unre­lat­ed to Kiln and has no impact on our operations.”

Dream BIG Dreams

Since the cre­ation of Bitwealth Hold­ings, Dickson’s name began pop­ping up more and more in Utah finan­cial circles.

Gavin Dick­son has been her­ald­ed as a dar­ing busi­ness genius, a “ser­i­al entre­pre­neur” wun­derkind who got his start as a teenag­er hus­tling up court­side Jazz tick­ets for vis­it­ing busi­ness titans, exec­u­tives and gurus like Tony Rob­bins so he could sit beside them and net­work dur­ing games.

Accord­ing to an inter­view on the Liv­ing Unscript­ed pod­cast, spon­sored by a com­pa­ny he was an investor in, Dick­son said he lost a for­tune in real estate after the 2009 reces­sion and then climbed back on top to even­tu­al­ly man­age a $50 mil­lion ven­ture cap­i­tal fund in 2017. 

It’s a clas­sic rags-to-rich­es-to-rags-to-rich­es sto­ry, told by Dick­son and through his bio pages on the com­pa­nies he’s start­ed or invest­ed in.

Dick­son first start­ed gar­ner­ing news in 2018 when he bought Fre­mont Island in the Great Salt Lake in part­ner­ship with the mon­ster truck-lov­ing stars of “The Diesel Broth­ers” tele­vi­sion show, with plans to devel­op the island.

In a 2018 Insta­gram post, Dick­son wrote about the pur­chase and how he and his “part­ner and new good friend” David “Heavy D” Sparks from the TV show had “big things com­ing!!” with hash­tags like #BitWealth and #Dream­BIG­Dreams.

Per­mit­ting prob­lems led Dick­son and his part­ners to sell the island to a con­ser­va­tion group in 2020.

At the start of the pan­dem­ic, Dick­son then helped co-found Utah Pay it For­ward, a phil­an­thropic orga­ni­za­tion that took dona­tions to buy restau­rant gift cards to donate to needy fam­i­lies. Dick­son was fea­tured on news pro­grams tout­ing the char­i­ta­ble endeavor.

But before he was buy­ing islands or pub­li­ciz­ing his phil­an­thropic efforts, Dick­son had already become well known in Utah’s bur­geon­ing tech com­mu­ni­ty for his start­up invest­ments, espe­cial­ly in Kiln, a tech-focused co-work­ing space that has offices in Lehi, Salt Lake City and Park City.

“We love Kiln, they do a lot of stuff for our com­mu­ni­ty,” said Clint Betts, CEO and cofounder of Sil­i­con Slopes.

He says the venue has host­ed numer­ous tech forums, retreats and even an after­par­ty for the most recent Sil­i­con Slopes Tech Sum­mit. Fed­er­al fil­ings show BitWealth Invest­ment put $8.4 mil­lion into Kiln, and Dick­son has tak­en cred­it for the invest­ments at pub­lic events.

Rubbing elbows

On Dickson’s social media feeds he has often point­ed to his net­work­ing with celebri­ties and impor­tant indi­vid­u­als, pos­ing with Tony Rob­bins at a Jazz game, or tak­ing his daugh­ter to the White House East­er Egg Roll in 2019 where she is pic­tured with then-first lady Mela­nia Trump.

On Dec. 9, 2019 Dick­son host­ed Utah Attor­ney Gen­er­al Sean Reyes at The Grid, anoth­er invest­ment fed­er­al doc­u­ments said was made with funds from the Bit­Club Net­work scheme. The venue is a mas­sive indoor go-kart­ing track where Dick­son joked about beat­ing Reyes in a friend­ly race. A tech forum was also host­ed at the Kiln space in Lehi with dif­fer­ent tech CEOs and Reyes as panelists.

In an Insta­gram post about the Decem­ber 2019 tech forum, Dick­son referred to Reyes as a “great friend, great guy!!”

The Utah Inves­tiga­tive Jour­nal­ism Project sought for weeks to arrange an inter­view with Reyes about his rela­tion­ship with Dick­son, but the state attor­ney gen­er­al did not grant an inter­view. Reyes’ cam­paign man­ag­er Alan Crooks said Dick­son did not donate to the cam­paign and that Reyes was at the event just to speak about “the AG’s role in weed­ing out bad actors in the (tech) industry.”

When asked how Reyes knew Dick­son, Crooks said: “I think that’s basi­cal­ly one of the first times (Reyes) met him,” in ref­er­ence to the tech forum at Kiln.

The office also did not respond to writ­ten fol­low-up ques­tions ask­ing whether Reyes was aware of the Bit­Club case, and if Dick­son had donat­ed to Reyes’ anti-human traf­fick­ing non­prof­it, the LAVA (Lib­er­ate All, Val­ue All) Foundation.

The Most Amazing Box

The Utah Attor­ney General’s office has stat­ed that it has “no respon­sive records” for any state inves­ti­ga­tions or com­plaints into Dick­son or his busi­ness entities.

The new own­ers of Dickson’s for­mer Boun­ti­ful man­sion (which he bought from for­mer Utah Jazz play­er Der­rick Favors) said they knew noth­ing about Dick­son but said four FBI agents showed up last year ask­ing about his whereabouts.

A search war­rant appli­ca­tion in the Bit­Club case filed for Goettsche’s home in Lafayette, Col­orado, also named Dick­son in describ­ing how Goettsche alleged­ly trans­ferred and hid assets from the Bit­Club operation.

“The inves­ti­ga­tion fur­ther revealed that Goettsche received funds that orig­i­nat­ed from (Bit­Club Net­work) from accounts main­tained by Gavin Dick­son — and Most Amaz­ing Box LLC,” the doc­u­ment reads.

Most Amaz­ing Box is a Dick­son-formed LLC.

Anoth­er fil­ing from Feb­ru­ary 2020, sought to pre­vent Goettsche from being released from cus­tody, call­ing him a flight risk because of his vast access to still unre­cov­ered cryp­to assets, includ­ing a pri­vate plane alleged “to have been pur­chased from an account in the name of Most Amaz­ing Box LLC, which appears, in turn, to be fund­ed by a Sin­ga­pore-based cryp­tocur­ren­cy trad­ing exchange,” the fil­ing states. At the end of 2020, Goettsche was released and placed on house arrest with an ankle mon­i­tor until the trial.

The fil­ing has iden­ti­fied 1,500 vic­tims so far and quot­ed a cus­tomer ser­vice com­plaint from one indi­vid­ual writ­ing from the African nation of Cameroon.

“U shall rot in hell for the amount of peo­ple you ren­dered home­less and (frus­trat­ed),” the alleged vic­tim stated.

In March, the Depart­ment of Jus­tice announced that Gor­don Beck­stead, a Neva­da accoun­tant, plead­ed guilty to mon­ey laun­der­ing and prepar­ing a false tax return to help Goettsche laun­der mon­ey from the Bit­Club scheme and avoid pay­ing more than $20 mil­lion in fed­er­al income taxes.

No tri­al has been set in the case against Goettsche and Bit­Club Network.



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