Hugh Austin Sentenced to 18 Years for $12m Crypto Scam

• Hugh Austin sentenced to 18 years for $12m crypto scam
• Over two dozen victims affected
• Funds misused for personal luxury
• Son, Brandon Austin, also sentenced

Eugene William Austin Jr., better known as “Hugh Austin,” has been sentenced to 18 years in prison for orchestrating a $12 million cryptocurrency fraud that preyed on the dreams of over two dozen victims. Cryptocurrency is a type of digital money that uses encryption techniques to secure transactions. Hugh Austin swindled these victims out of their hard-earned cash by offering fake investment opportunities, using the funds to fuel his personal luxury spending spree on items like luxury hotels, flights, and fine dining.

Austin, a 62-year-old from Port Jefferson, New York, used his charm and deceit to convince victims to invest in fabricated cryptocurrency deals, short-term investment opportunities, and phony brokerage services. He promised funding from wealthy backers that, unsurprisingly, never materialized. Instead of funding the next big crypto project, Austin’s victims funded his next big steak dinner.

The conviction came in September 2024, with Austin found guilty of conspiracy to commit wire fraud (planning to scam people using electronic communications), money laundering (cleaning dirty money), and transporting stolen property across state lines (moving stolen money between states). U.S. District Judge P. Kevin Castel handed down the sentence, which also includes three years of supervised release, the forfeiture of over $6 million, and restitution payments exceeding $12.6 million.

Austin’s son, Brandon Austin, was not spared from the legal repercussions, having previously received a four-year sentence for his involvement in the same fraudulent activities. This family affair of fraud underscores the lengths to which some will go to exploit the burgeoning crypto market.

U.S. Attorney Jay Clayton emphasized the Justice Department’s commitment to rooting out such scams, stating,

“This Office will continue to pursue those who exploit trust and use cryptocurrency as a cover for fraud.”

This case is a testament to the ongoing efforts by U.S. authorities to combat cryptocurrency-related fraud, a challenge that grows as the crypto space expands.

The Scam

Hugh Austin’s scheme was a complex web of lies. He promised investors high returns on “exclusive” cryptocurrency investments, often backed by nonexistent wealthy investors. For instance, he claimed to have secured funding from a Silicon Valley billionaire, but no such person ever existed. Instead, the money flowed into Austin’s pockets, funding his lavish lifestyle. This case highlights the dangers of falling for promises that are nothing but hot air, reminding us that due diligence is crucial when investing in cryptocurrencies.

The Conviction

In September 2024, Austin was convicted of conspiracy to commit wire fraud, money laundering, and transporting stolen property across state lines. Key evidence included bank records showing large transfers to luxury hotels and fine dining establishments, directly contradicting Austin’s claims of investment in crypto projects. The defense argued that Austin believed the investments were legitimate, but the prosecution presented clear evidence of deceit.

The Sentencing

U.S. District Judge P. Kevin Castel sentenced Austin to 18 years in prison, citing the severity of the fraud and its impact on victims. Additionally, Austin must serve three years of supervised release, forfeit over $6 million, and pay over $12.6 million in restitution. Brandon Austin, Hugh’s son, received a four-year sentence for his role in the scam, which involved handling some of the financial transactions.

Implications for Crypto

This case is part of a larger trend of increasing regulatory scrutiny on cryptocurrency frauds. The U.S. Justice Department’s focus on such cases signals a commitment to protecting investors and maintaining the integrity of the crypto market. It also highlights the need for investors to be vigilant and informed about the risks associated with cryptocurrency investments. While the crypto world offers unprecedented opportunities for financial freedom and innovation, it also attracts those looking to exploit its decentralized nature. This case serves as a cautionary tale, reminding us that while the potential for growth and disruption is immense, so too are the risks of fraud and deceit.

The Austin case comes at a time when the DOJ has announced a policy shift to end “regulation by prosecution” of digital assets. This policy, effective from April 7, 2025, directs prosecutors to focus on cases involving fraud and the use of digital assets in furtherance of other crimes, rather than regulatory violations. This change does not affect the Austin case, as it was prosecuted before the policy was implemented, but it provides context for future cases and underscores the DOJ’s strategic pivot in how the U.S. government approaches digital asset enforcement.

Key Takeaways and Questions

• What was Hugh Austin convicted of?

  Hugh Austin was convicted of conspiracy to commit wire fraud, money laundering, and transporting stolen property across state lines.

• How long was Hugh Austin sentenced to prison?

  Hugh Austin was sentenced to 18 years in prison.

• What was the total amount of the scam?

  The total amount of the scam was $12 million.

• How were the victims’ funds misused?

  The victims’ funds were used for personal expenses such as luxury hotels, flights, and restaurants.

• What additional penalties did Hugh Austin receive?

  In addition to prison time, Hugh Austin was ordered to serve three years of supervised release, forfeit over $6 million, and pay over $12.6 million in restitution.

• Who else was involved in the scam and their sentence?

  Brandon Austin, Hugh Austin’s son, was also involved and sentenced to four years in connection with the fraud.

• What is the U.S. Justice Department’s stance on cryptocurrency fraud?

  The U.S. Justice Department, as stated by U.S. Attorney Jay Clayton, is committed to pursuing those who exploit trust and use cryptocurrency as a cover for fraud.

• What are the broader implications of this case for the crypto industry?

  This case underscores the need for increased regulatory measures and investor education to combat fraud within the cryptocurrency market.

• How can investors protect themselves from similar scams?

  Investors should conduct thorough research, verify the legitimacy of investment opportunities, and be wary of promises of high returns with little risk.