In a surprising turn of events, the U.S. Department of Homeland Security mistakenly instructed Estonian crypto fraudsters Ivan Turogin and Sergei Potapenko to self-deport just months before their sentencing for a massive Ponzi scheme. This order contradicts a court directive requiring them to remain in the U.S. until their sentencing in August.
Key Takeaways
- Ivan Turogin and Sergei Potapenko operated a $577 million cryptocurrency Ponzi scheme through HashFlare.
- They were extradited from Estonia and are currently awaiting sentencing in Seattle.
- The DHS mistakenly ordered them to leave the U.S., causing significant anxiety.
- A year-long deferral to the deportation order has been secured by the DOJ.
Background of the Case
Turogin and Potapenko, founders of HashFlare, were charged with defrauding investors globally, amassing over $575 million through their fraudulent operations. They were extradited to the U.S. in 2022 following an 18-count indictment related to their scheme. Initially pleading not guilty, both men changed their plea to guilty on one count of conspiracy to commit wire fraud in February 2025, which could lead to a maximum of 20 years in prison.
The Mistaken Order
On April 11, 2025, both men received alarming emails from the DHS instructing them to leave the United States immediately. The emails stated:
- "It is time for you to leave the United States."
- "DHS is terminating your parole. Do not attempt to remain in the United States – the federal government will find you."
This communication not only contradicted the court’s order but also threatened them with criminal prosecution and civil penalties if they failed to comply. Their lawyers expressed concern over the distress caused by these communications, highlighting the potential for serious immigration errors.
Legal Response
In response to the DHS’s order, the defense team filed a letter with the court, emphasizing that the men were under a court order to remain in King County, Washington, until their sentencing. The letter noted the significant anxiety caused by the DHS’s actions and referenced the broader issues of immigration enforcement mistakes.
Resolution and Next Steps
Following the defense’s letter, the Department of Justice intervened, coordinating with the DHS to secure a year-long deferral of the self-deportation order. This decision aims to ensure that Turogin and Potapenko can remain in the U.S. until their sentencing, which is scheduled for August 14, 2025.
Their legal team plans to request a sentence of time served, which would allow them to return to Estonia without additional prison time. The outcome of their sentencing will be closely watched, given the scale of their fraudulent activities and the implications for cryptocurrency regulation.
As the situation unfolds, it raises questions about the effectiveness of immigration enforcement and the complexities involved in cases that intersect with criminal justice and international law.
