Pizza chain’s biggest investor charged over cryptocurrency scam

The largest investor in collapsed NSW pizza chain Little Caesars has been charged over an alleged billion-dollar cryptocurrency scam.

• Pizza giant’s shock store closures as debts hit $8.5m

The largest investor in collapsed NSW pizza chain Little Caesars has been charged over an alleged billion-dollar cryptocurrency scam.

The Daily Telegraph can reveal $14 million was poured into the chain by Nevada-based Bitwealth Holdings LLC, controlled by Colorado man Matthew B. Goettsche, who is in custody after being accused of masterminding a $1.03 billion global bitcoin fraud.

A recent report to creditors by the chain’s administrators Jirsch Sutherland says Little Caesars director Ernest ­Khoury was introduced to Bitwealth in 2017 to secure funding to expand the business.

Little Caesars Australia director and owner Ernest Khoury, who is not facing any charges. but has left the country and not provided contact details.

Bitwealth injected the $14 million across the 2018-19 ­financial year, leading to store openings at Newcastle, ­Orange, Bathurst, St Marys, Darlinghurst, Surry Hills and Lake Macquarie.

However, in July this year Bitwealth became concerned about a “lack of reliable information being provided from the director”, Mr Khoury.

It started its own reviews of the Caesars operation, which quickly led to store closures. It was placed in administration in October.

In November, Jirsch told creditors a sale to Bitwealth, Caesar’s “largest investor”, was being explored.

But yesterday a Jirsch spokeswoman said Bitwealth had “pulled out of the process” citing “commercial reasons”.

On December 5, US prosecutors charged Goettsche and two others with conspiracy to engage in wire fraud. They are accused of fleecing “cryptocurrency mining pool” investors of at least $US722 million.

The indictment filed with the US District Court in New Jersey alleges Goettsche “created and operated a worldwide fraudulent scheme” and that he referred to investors as “dumb”, “morons”, “idiots” and “sheep” during chatroom discussions with his co-accused.

Goettsche was arrested in Colorado. He has been ­detained without bail.

The indictment refers to a company called Getch Holdings LLC. Official Nevada State records show that company has the same registered address as Bitwealth Holdings LLC and that Goettsche is the “managing member” of both.

Jirsch’s spokeswoman said “with regards to Matthew Goettsche, investigations are ongoing”.

The largest single creditor of Caesars is CBA, owed about $2 million. Several million ­dollars more is owed to others, including $230,000 to ­employees.

KFC is owed more than $260,000. KFC managing director Nikki Lawson said it was for rent for a Newcastle site.

Minutes from a creditors’ meeting about a month ago say the operations of the company were “mishandled, particularly noting that there was a fine for driving an unregistered vehicle in July 2019”.

Mr Khoury has left the country. As first reported by The Telegraph on Saturday, the ­administrators do not know where he is. Yesterday they said he has “not provided a contact address or number and has communicated by email or through his legal advisers.

The Administrators have not received a completed ­Report on Company Activities and Property from Mr Khoury, which is a statutory obligation of a director in these circumstances.

The Administrators will continue to seek Mr Khoury’s co-operation through the investigation process to better understand the background to the business’ current circumstances.”

He is not facing any charges.