Federal public defender appointed for Shane Hvizdzak in criminal case
A federal judge has agreed to appoint a public defender for Shane Hvizdzak to represent him on criminal charges relating to the cryptocurrency hedge fund scheme he was allegedly operating with his brother.
Shane Hvizdzak, 33, of Bradford, and Sean Hvizdzak, 35, of St. Marys, were accused by the Securities and Exchange Commission of bilking investors out of millions of dollars. Investigators allege the two took money from investors, said it was being invested in digital assets, and fabricated statements saying the investments were earning huge returns.
However, the SEC said the brothers took in the neighborhood of $26 million from investors, put it in their personal accounts and then moved it outside the United States. Some of the funds were put in untraceable digital accounts, the SEC alleged.
The brothers' assets have been frozen since the SEC's civil case was filed in June of 2020. The criminal case was filed in August of 2021.
Sean Hvizdzak has maintained his innocence, while Shane Hvizdzak has claimed his Fifth Amendment right against selfincrimination through filings in the SEC case.
In March, the attorney for Shane Hvizdzak, Efrem Grail of Pittsburgh, filed a motion to withdraw from the case. He told federal Judge W. Scott Hardy that the attorney-client relationship was “irretrievably broken” and that Hvizdzak intended to get another attorney.
According to his motion, Grail said Hvizdzak fired him from the case and that separately, he sought to withdraw. He outlined rules under which withdrawal is permitted, including when it can be accomplished without material effect on the client, when “the client insists upon taking action that the lawyer considers repugnant or with which the lawyer has a fundamental disagreement,” or when a client isn't paying his bill.
He noted Hvizdzak's case is still in the early stage and withdrawal could be accomplished “without material effect on the interests of the client.”
Grail noted that he would surrender all papers and property of the client's as required.
On July 1, Hardy granted Grail's motion to withdraw and appointed Assistant Federal Public Defender Aaron Sontz to represent Shane Hvizdzak.
According to Hardy's order, Hvizdzak requested appointment of counsel, appeared before the court and was sworn to testify truthfully as to his financial ability to hire an attorney and at this time, appeared to be indigent. Hardy granted the motion to appoint Sontz with a caveat — “the court may require (Hvizdzak) to pay all or part of the cost of his representation at the conclusion of the case.”
The civil case is essentially on hold until the criminal case proceeds. In August, the brothers were each hit with 65-count criminal indictments, alleging the same conduct as in the civil case.
At the time of the criminal indictment, Acting U.S. Attorney Stephen R. Kaufman said the law provides for a theoretical maximum total sentence of 810 years in prison, a fine of $12.5 million or both for Shane Hvizdzak and a maximum total sentence of 550 years in prison, a fine of $7 million or both for Sean Hvizdzak.
Assistant U.S. Attorney Christian A. Trabold is prosecuting the case on behalf of the government.
The Federal Bureau of Investigation and Internal Revenue Service criminal investigators