TL;DR: Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Federal Police (AFP) announced a “27-year-old Bulleen man has been arrested during the second phase of an [AFP] investigation into an organised crime syndicate. Following the arrests, AUSTRAC suspended the registrations of two digital currency exchange businesses the man is associated with.” CoinSpice has learned AusCoin founder Sam “Kazz” Karagiozis is the unnamed man, a person well-known in Australian cryptocurrency circles for his flashy lifestyle and bold claims. ***UPDATE at bottom as of 8 March 2019, 13:00 UTC***
AusCoin’s Sam “Kazz” Karagiozis Arrested as Part of Organized Crime Syndicate
The arrest comes amid a larger investigation, dating back to Fall of 2017. AFP reports finding “seizing steroids, Australian currency and cryptocurrency related items” in the home of a “27-year-old Bulleen man” who “was subsequently arrested and charged with importing, trafficking and possessing a total of approximately 30 kilograms of drugs, such as MDMA, cocaine, methamphetamine and ketamine.”
CoinSpice believes the man to be Sam “Kazz” Karagiozis, founder of AusCoin. He is well known within the Australian cryptocurrency scene for flashing his MR BTC Bentley, and for being part of what is widely considered to be a questionable operation at best, involving Bitcoin ATMs and an initial coin offering (ICO), AusCoin. Indeed, a 60 Minutes profile almost a year ago exactly portrayed the project in less than flattering light (see video embed below).
“Police will allege in court that the 27-year-old played a key role in directing the operations of the criminal syndicate, which used various dark net sites, bitcoin accounts and legitimate business for the sourcing, payment and distribution of the illicit drugs,” the joint law enforcement press release detailed. “Orders were obtained from the County Court of Victoria to restrain property valued in excess of $2 million,” which included “several bank accounts, real estate properties, motor vehicles, a motorbike, cash and cryptocurrency.”
Karagiozis Charged with 14 Counts, 2 Possible Life Sentences
Law enforcement have reportedly “suspended the registration of two digital currency exchange businesses where the man was a key member (AUSCOIN ATM and SK BTC) removing their ability to continue to conduct business.” At present, the AusCoin site appears to be functioning. Karagiozis was also active on Localbitcoins, and that account seems to be unrestricted as well.
The same day, however, 8 March 2019, the AusCoin Facebook account made at least two sudden announcements. One was signed by Sam Karagiozis himself, and detailed the resignation of CVO Michael Sloggett, wishing him well while insisting AusCoin would continue with its roadmap. Minutes later, Sloggett appeared to have issued a statement confirming his resignation while lamenting that fact at the same time. Neither made mention of Karagiozis’ arrest nor any limiting of the company’s operations by authorities.
Karagiozis was charged with more than a dozen counts, ranging from importing drugs, which carries life imprisonment (there are two such charges), to trafficking in drugs (25 years, 4 charges), to 4 lesser drug offences with 10 years maximum imprisonment. None of the charges appear to be directly related to AusCoin.
***UPDATE: As of 8 March 2019, 13:00 UTC a Telegram account post (directly above) claiming to be from Sam Karagiozis’ former partner Michael Sloggett (seen debating with a 60 Minutes reporter in the video from a year ago, below), posted confirmation of Karagiozis being arrested and incarcerated. Sloggett describes himself in the post as being “in shock” and not knowing “what to believe right now.”
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