South African crypto mogul released from US jail

After South African authorities failed to file the necessary paperwork for his extradition hearing, South African cryptocurrency mogul Riccardo “fluffypony” Spagni was released from the Daviess County Jail in Owensboro, Kentucky.

In a message posted to Twitter on Tuesday, Spagni said that he is actively working with his attorneys to return to South Africa and face the fraud charges against him.

“That’s what I’ve always wanted to do,” Spagni stated.

Spagni was the lead maintainer of the privacy-focussed Monero cryptocurrency for five years. He stepped down in December 2019.

He launched a blockchain startup called Tari Labs in South Africa in 2018 that offered a free online university to aid open-source blockchain projects and train developers.

US law enforcement arrested Spagni in Nashville while the private jet he was travelling on stopped to refuel while flying from New York City to Cabo San Lucas in Mexico.

Spagni was arrested at the request of the South African government on the allegation that he failed to appear for his hearing in a fraud case involving his former employer, Cape Cookies.

The US court emphasised that Spagni’s detention was subject to strict time limits.

The extradition treaty gave the South African government sixty days to submit the necessary documents to the United States for the extradition hearing.

According to court documents filed yesterday, South African authorities failed to meet the 19 September deadline.

“After serving sixty-one days in solitary confinement, Spagni is now out of custody because South Africa failed to make a timely submission in support of its extradition request,” Spagni’s legal counsel in the US stated.

“Spagni now seeks information already in the possession of the [US] Government, namely South Africa’s submission for provisional arrest.”

The lawyer said this is to make an informed decision about waiving extradition while out of custody and determine if South Africa’s provisional arrest request cites an arrest warrant within the treaty.

According to court documents filed in August, Spagni is accused of defrauding Cape Cookies to the tune of R1,453,561.47.

Spagni was employed by Cape Cookies from 1 October 2009 to 8 June 2011 and allegedly intercepted invoices between the company and IT supplier Ensync.

He is accused of fabricating invoices from Ensync to Cape Cookies, placing the bank account details and VAT number of his own company on the documents.

The court documents state that Spagni inflated the invoice amounts, and it was found that Ensync’s actual invoices were then paid at a later date.

Spagni also stands accused of generating false invoices for three different fictitious IT suppliers.

He pleaded not guilty to the charges, then travelled to the United States after receiving an O–1 nonimmigrant visa to the United States.

This visa is awarded to individuals who demonstrate extraordinary ability or achievement.

According to the court documents, Spagni chose not to return to South Africa for his court date because he was afraid of potential exposure to Covid–19, which would hamper his plans to emigrate to the United States with his wife.

Spagni cited fears of contracting Covid–19 as reasons for delaying his trial in South Africa, saying that he has chronic asthma and is overweight — comorbidities that put him at risk of experiencing severe symptoms.

After several delays since June 2020, Spagni’s court appearance was finally scheduled for 24 Match and 19 April 2021.

On 21 March, Spagni and his wife travelled from South Africa to Bermuda, where they quarantined before entering the United States on 19 April.

Spagni and his wife settled in New York, where they established two residences in his name.

When the court convened on 24 March, Spagni was not present, and his lawyer stated that he had given Spagni notice of the trial date and that he had no knowledge of Spagni’s whereabouts and was unable to contact him.

The South African Police Service tried to locate Spagni but were unsuccessful, as he had already left the country.

Spagni maintains that he thought the court date was merely a status conference.

However, the US judge said he found Spagni’s explanation lacking.

He noted that Spagni himself said he chose not to fly from Bermuda back to South Africa for his next court date on 19 April because he didn’t want to risk catching Covid–19 and jeopardising his emigration plans to the US.

When the court convened without Spagni present on 19 April, his counsel again stated that he did not know where his client was, and he moved to withdraw as Spagni’s attorney.

The Magistrate Court of the District of Cape Town issued a warrant for Spagni’s arrest.

Court documents show that the District Court for the Middle District of Tennessee issued a warrant for Spagni’s arrest on 20 July 2021.

Law enforcement arrested Spagni that same day while he was on his way to a digital currency conference.

In their application to have Spagni held without bail, US law enforcement argued that he was a flight risk because he “is believed to have significant cryptocurrency assets” and has a watch valued at $800,000 (R12 million).

Spagni’s wife, Saskia Spagni, posted a clipping from a US newspaper to Twitter on Saturday, which reported that the Daviess County Detention Center had experienced a Covid–19 outbreak.

According to the report, fourteen inmates and six staff were confirmed to have contracted the virus.

“Thanks very much for the exposure to Covid, South Africa and USA,” she stated.

MyBroadband contacted Spagni’s legal representative in South Africa for comment, but he could not immediately answer questions regarding the status of the case.

Now read: How to declare your Bitcoin to SARS

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South African crypto mogul released from US jail