SEATTLE — The U.S. Department of Homeland Security last week sent a letter to two Estonian men telling them to leave the U.S. “immediately.”
One problem: The two men are set to be sentenced in federal court for running a $577 million cryptocurrency Ponzi scheme. The court had ordered the men to stay on parole in King County until the sentencing in August.
“These communications have caused Ivan and Sergei significant anxiety,” attorneys for Sergei Potapenko and Ivan Turogin told Judge Robert Lasnik of the Western District of Washington in a joint letter last week.
Potapenko and Turogin pleaded guilty in February to running a scheme from 2015 to 2019 that, according to The Associated Press, tricked hundreds of thousands of people into buying contracts for a cryptocurrency mining service called HashFlare and investing in a virtual currency bank called Polybius Bank.
HashFlare didn’t have nearly enough computing power required to mine the level of cryptocurrency it promised victims across the globe, some of whom lived in Western Washington. Potapenko and Turogin falsified the data and used the proceeds to buy real estate and luxury vehicles, according to federal prosecutors.
The two were extradited to the U.S. from Estonia in May 2024 before they were released on bond in July, with the condition that they stay in King County.
Despite the planned August sentencing, the letter from the DHS gave the two men instructions that conflicted with their court orders.
“DHS is terminating your parole,” read the letters sent to both men separately, first reported by Law360. “Do not attempt to remain in the United States — the federal government will find you. Please depart the United States immediately.”
Letters from the DHS with similar, if not identical, language telling its recipients to self-deport immediately were sent across the country last week, according to reports.
Some recipients were U.S. citizens, like a U.S.-born immigration lawyer in Massachusetts. Clients of another immigration lawyer in Ohio, many of them seeking asylum here, received the same letter from Customs and Border Protection, even though their attorney said they have the right to go through the immigration court process.
Potapenko and Turogin intend to comply with the court order to stay in King County, despite instructions from the federal government, their New York attorneys Andrey Spektor and Mark Bini told The Seattle Times in an email.
The defense attorneys also worked with prosecutors to resolve the issue with Homeland Security Investigations approving a one-year deferral of the DHS order to self-deport, starting on April 11.
The Estonian men and the DHS are on the same page in a sense, the attorneys said. They plan to ask the court to send Potapenko and Turogin home to Estonia after their sentencing.
“Although there is nothing Ivan and Sergei would want more than to immediately go home, they understood that they are also under Court order to remain in King County,” the attorneys said.
Neither the U.S. Department of Justice nor the DHS responded to requests for comment.
