A California man pleaded guilty to a cryptocurrency mining fraud of at least US$722 million that prosecutors said amounted to a “high-tech Ponzi scheme.”

Joseph Frank Abel, of Camarillo, admitted he conspired to offer and sell unregistered securities and subscribed to a false tax return, prosecutors said in a statement Thursday.

Abel, 50, was part of the BitClub Network, which solicited money from investors in exchange for shares in purported cryptocurrency mining pools and rewarded them for recruiting new investors, according to the U.S. In legitimate mining pools, companies buy special equipment to support networks operating digital coins like Bitcoin and get the coins in return.

The phony mining scheme operated from April 2014 to December of last year, U.S. Attorney Craig Carpenito in New Jersey said in the statement. Abel and four co-defendants were charged in December of 2019.

Ponzi schemes have abounded in the cryptocurrency space, with projects such as BitConnect, OneCoin and others costing investors billions of dollars. Particularly during the 2017 and 2018 initial coin offering boom, many people invested in projects that didn’t have a known team or even a product behind them. Federal and state agencies and prosecutors started a major crackdown in 2018.

One of Abel’s co-defendants referred to potential BitClub Network investors as “dumb” and “sheep,” saying he was “building this whole model on the backs of idiots,” prosecutors said in December. In September 2017, the government said, the co-defendant sent an email to a conspirator in which he suggested, with a profane acronym, that BitClub would allow them to “retire RAF!!!”

Abel, who promoted the scheme to investors worldwide, is scheduled to be sentenced on Jan. 27.

The case is U.S. v. Goettsche, 19-cr-00877, U.S. District Court, District of New Jersey (Newark).