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WASHINGTON — Two Estonian nationals awaiting sentencing for their roles in a massive $577 million cryptocurrency Ponzi scheme have received alarming emails from U.S. immigration authorities ordering them to leave the country—despite a federal court order mandating they remain in the United States, their attorneys said.

Defendants Sergei Potapenko and Ivan Turogin, who each pleaded guilty in February to one count of wire fraud conspiracy, were extradited from Estonia last year. The men are free on bond under conditions that require them to stay in King County, Washington, until their sentencing hearing set for August 14.

But in a letter filed Friday with U.S. District Judge Robert Lasnik, defense attorneys said their clients had received disturbing messages from the U.S. Department of Homeland Security (DHS) on April 6, instructing them to “immediately” leave the country or face law enforcement action. Turogin received a second, nearly identical email on Friday, warning, “Do not attempt to remain in the United States — the federal government will find you.”

Judicial Order vs. Immigration Misstep

The defense team expressed concerns over what they describe as a bureaucratic error, referencing the recent mistaken deportation of another individual to an El Salvador prison.

“Although we do not doubt the sincerity of the prosecution team in working to resolve the issue, we are concerned,” the attorneys wrote. “It would be unfathomable for Ivan and Sergei to be approached and detained in front of their visiting families.”

If the matter is not resolved within days, the attorneys said they will request a court hearing and ask DHS representatives to attend. Both defendants plan to request time served and permission to return to Estonia following sentencing.

Crypto Entrepreneurs or Fraud Architects?

Federal prosecutors allege that Potapenko and Turogin misled investors over a seven-year period through a fraudulent cloud-based crypto mining scheme called HashFlare. Customers were offered contracts to rent mining equipment and promised returns funneled through a so-called digital bank, Polybius, which the government says never existed.

In reality, HashFlare did not own functional mining equipment, and investors were allegedly paid back using purchased, not mined, cryptocurrency—a classic Ponzi structure, prosecutors claim.

However, defense attorneys maintain that the men built legitimate businesses and caused no actual financial losses.

“Sergei is committed to complying with all court conditions,” said his attorney Mark E. Bini of Reed Smith LLP. “We believe the sentencing hearing will show Sergei and his partner are crypto innovators... and that he should be allowed to return home to reunite with his family.”

Turogin’s counsel, Andrey Spektor of Norton Rose Fulbright LLP, voiced similar sentiments, saying his client followed all rules “despite the position DHS has put him in.”

Case Details and Legal Teams

The case is USA v. Potapenko et al., case number 2:22-cr-00185, in the U.S. District Court for the Western District of Washington.

• The government is represented by Adrienne E. Rosen and Olivia Zhu of the DOJ’s Criminal Division, along with Seth Wilkinson and Jehiel I. Baer of the U.S. Attorney’s Office.

• Potapenko is represented by Mark E. Bini of Reed Smith LLP and Mark N. Bartlett of Davis Wright Tremaine LLP.

• Turogin is represented by Andrey Spektor and Robert H. Westinghouse of Goldfarb & Huck Roth Riojas PLLC.

The U.S. government has yet to comment publicly on the DHS notices.