Judge Holds Bitcoin Scammer Nicholas Truglia in Contempt for Failing to Pay $20 Million Crypto Hack Restitution

Crime, News | March 8, 2024 By:

On Thursday, February 29, 2024, Alvin K. Hellerstein, Senior Judge of the United States District Court for the Southern District of New York, held bitcoin scammer Nicholas Truglia in contempt of court. Judge Hellerstein found that Truglia had willfully failed to pay over $20 million in restitution to tech entrepreneur Michael Terpin, whose cryptocurrency account Truglia had hacked in 2018.

After a 90-minute hearing, Judge Hellerstein ruled that Truglia remains in contempt unless he either pays restitution to Terpin or conclusively proves an inability to pay. However, the judge made clear he does not find Truglia’s claims of being unable to access funds credible.

“This is not a case of inability to pay. He can sit in jail until he decides to repay Mr. Terpin. I don’t believe that he doesn’t have assets,” Judge Hellerstein stated.

In 2022, Truglia received an 18-month prison sentence from Judge Hellerstein and was ordered to pay restitution for his role in the cryptocurrency hack. At his original sentencing, Truglia had pledged to fully repay Terpin, which influenced Judge Hellerstein to impose a lighter sentence than he otherwise would have. However, Truglia has failed to make any restitution payments.

During the hearing, Truglia’s defense attorney argued that his client genuinely cannot access a digital wallet containing Bitcoin now worth over $100 million. However, prosecutors said Truglia has been dishonest and deceitful, transferring undisclosed assets and spending money on luxury goods while claiming inability to pay. Judge Hellerstein expressed agreement with prosecutors, saying Truglia was lying about his financial situation.

The judge set a September 17th date for Truglia to return to court and potentially purge the contempt finding. Prosecutors have also requested Truglia be resentenced for deceiving the court. If Truglia fails to convince the court of his purported financial difficulties, he could remain jailed indefinitely for civil contempt.