Ex-Cred Executives Plead Guilty to $150M Crypto Fraud Scheme
Two former executives of Cred Inc., Daniel Schatt and Joseph Podulka, pleaded guilty to wire fraud conspiracy, admitting to misleading customers about the company's financial status, resulting in losses of up to $150 million. They acknowledged presenting selectively positive information while omitting negative details to attract customer deposits. Cred filed for bankruptcy in October 2020, with over 6,000 claims totaling more than $140 million. The company's decline began during the March 2020 Bitcoin crash, which led to an inability to meet margin calls. Cred's financial instability was exacerbated by a $40 million shortfall from its primary borrower, MoKredit, which received about 80% of customer assets. The company failed to disclose MoKredit's repayment issues to customers. Additional losses occurred when a Chief Capital Officer allegedly stole Bitcoin worth $2 million. Prosecutors recommended sentences of up to 72 months for Schatt and 62 months for Podulka, with a sentencing hearing scheduled for August 26.
