Estonian Men Caught in U.S. Crypto Ponzi Scheme Face Confusion Over Deportation Orders

By Kai Uyehara, Seattle Times Staff Reporter

April 18, 2025

The U.S. Department of Homeland Security (DHS) has recently created confusion for two Estonian men involved in a significant cryptocurrency fraud case. Ivan Potapenko and Sergei Turogin are currently awaiting sentencing for operating a $577 million Ponzi scheme, but last week, they received notices instructing them to leave the United States immediately.

Background on the Case

Potapenko and Turogin, who pleaded guilty in February 2025, are accused of running a fraudulent operation from 2015 to 2019. The scheme misled hundreds of thousands of individuals into purchasing contracts for a cryptocurrency mining service called HashFlare and investing in a virtual currency bank named Polybius Bank. Investigators allege that the pair misrepresented the mining capabilities of HashFlare, resulting in significant financial losses for victims, some of whom reside in Western Washington. Using the funds garnered from their deceptive activities, they reportedly acquired luxury cars and real estate.

In May 2024, both men were extradited to the U.S. from Estonia. They were released on bond in July under the condition that they remain in King County, Washington, until their trial.

DHS Deportation Orders Create Turmoil

Despite the upcoming sentencing scheduled for August 2025, the DHS sent letters to Potapenko and Turogin stating that their parole had been terminated and directed them to "depart the United States immediately." This directive has not only added stress to the men but also raised questions regarding adherence to the awaiting court orders.

In a letter to U.S. District Judge Robert Lasnik, the men's attorneys expressed their concerns about the anxiety induced by the DHS communications, which contradict existing legal requirements.

"This conflicting information has caused Ivan and Sergei significant anxiety," the attorneys noted.

Reports suggest that similar letters demanding self-deportation were sent to other individuals across the country, including U.S. citizens. Past recipients have included asylum seekers and an immigration lawyer in Massachusetts, sparking wider concern about the consistency of federal messaging.

Legal Resolution and Future Steps

Despite the pressure from the DHS, Potapenko and Turogin intend to follow the court's directive to stay in King County. Their attorneys, Andrey Spektor and Mark Bini, emphasized their commitment to comply with the legal process. They mentioned that they had worked with prosecutors to seek clarification on the confusing situation with Homeland Security Investigations, which ultimately granted the men a one-year deferment on the deportation order, beginning April 11, 2025. Looking ahead, both Potapenko and Turogin wish to return 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," their attorneys stated.

As this case unfolds, it highlights the complexities and challenges that can arise in legal proceedings, especially when federal and judicial instructions conflict.

For inquiries, you can reach Kai Uyehara at 206-652-6419 or kuyehara@seattletimes.com.