After FBI investigation, crypto personality Thomas Sfraga, aka 'TJ Stone,' pleads guilty to wire fraud

Thomas John Sfraga, also known as "TJ Stone," pleaded guilty Thursday in a Brooklyn federal court to wire fraud charges.

Sfraga allegedly promised investors up to 60% returns in three months for a fake cryptocurrency digital wallet, according to a Friday release from the U.S. Department of Justice. Instead, he purportedly pocketed the funds, using some of the money to pay prior victims of his schemes. He faces up to 20 years in prison and a restitution of $1.33 million, the DOJ release adds.

“For years, Sfraga brazenly lied to friends, neighbors and investors to swindle over $1.3 million of their hard-earned life savings,” stated U.S. attorney Breon Peace in the statement. Sfraga only holds experience in real estate development, media relations, podcasting and cryptocurrency, as well as hosting New York crypto events, the release continues.

Sfraga also claimed to own "Vandelay Contracting Corp." and "Build Strong Homes LLC." As the DOJ notes, George Constanza, a character from the American television show "Seinfeld," asserts that he interviewed with a fictional company called Vandelay Industries. Sfraga allegedly convinced investors to fund non-existent construction projects.

FBI investigation on Sfraga

In a December 2023 complaint against Sfraga, which informed his arrest, a Special Agent from the Federal Bureau of Investigations noted that he engaged in fraudulent behavior related to cryptocurrency staking.

Cryptocurrency staking involves locking up digital assets to help support a blockchain's proof-of-stake consensus system, which can earn the staker rewards in the form of yields.

Sfraga appears to have told a victim that individuals can set up virtual wallets to buy into pools of cryptocurrency and that "staking generated significant returns at little or no risk," the agent wrote in the complaint.

"Sfraga described the investment as an 'ironclad situation' with 'no risk,'" noting "investors would profit whether the value of cryptocurrency rose or fell, because the investors would sell the staking to others and profit off of any cryptocurrency transactions."

Sfraga told the same victim that "there was an upcoming round of investment in a new staking, but that the minimum investment was $25,000," adding that June 8, 2022, was the deadline for the investment.