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The co-founders of Bitqyck, Bruce Bise and Samuel Mendez, were each given a 50-month prison term. Following their refusal to file Bitqyck’s taxes in 2016 and 2017, the IRS opened a criminal investigation into the couple.
The prosecution of Bise and Mendez is a classic MLM crypto heist; Mr. Mendez and Mr. Bise acknowledged that more than 13,000 investors contributed almost $24 million to Bitqyck. The defendants utilized Bitqyck funds for personal needs such as casino trips, automobiles, opulent house furnishings, art, and rent instead of keeping their obligations to these investors.
Mr. Bise and Mr. Mendez earned about $4.68 million and $4.48 million, respectively, from 2016 to 2018.
On the tax front, it was the failure to file with the IRS that caused problems.
Mr. Bise underreported his income to the IRS for the years 2016 and 2017, which resulted in a $371,278 tax loss. Mr. Mendez also underreported his income to the IRS for that time period, which resulted in a $311,155 tax loss. Even though Bitqyck earned more than $3.5 million from investors in 2018, it filed zero corporate tax returns.
Mr. Bise and Mr. Mendez, collectively and separately, owe the United States government a tax loss totaling more than $1.6 million. In August 2021, a criminal complaint was submitted against Bise and Mendez. In September 2021, Bise admitted guilt to tax fraud. A month later, in October, Mendez entered a guilty plea. In March, the two were given a 50-month prison term.
The report was delayed since I was unaware of the situation. Bitqyck was reviewed by us in March 2017. Through our investigation, we were able to pinpoint Bitqyck as a continuation of the securities fraud Mendez and Bice began with Calorchi.
In 2019, the SEC sued Bitqyck, Mendez, and Bice, initially projecting $13 million in customer losses.
The amount would rise to $24 million as a result of the IRS’s probe into the theft of 13,000 investors. According to the SEC’s complaint, Bise and Mendez falsely stated that each Bitqy token delivered fractional shares of Bitqyck stock through a “smart contract” and that QyckDeals, a daily deals platform employing Bitqy, was a global online marketplace.
According to the complaint, the defendants misrepresented to investors that BitqyM tokens gave ownership rights to a Bitqyck cryptocurrency mining operation that used electricity at a discounted cost. In fact, Bitqyck did not possess any mining facilities or have access to subsidized electricity.
Bitqy is also accused of operating TradeBQ, an unregistered national security exchange that allowed trading in just one security, Bitqy, unlawfully with the help of its creators.
Mendez and Bice paid $10.1 million to resolve the SEC’s allegations of securities fraud against them, which included disgorgement and two civil penalties.
