The federal government has seized a former bitcoin mining operation facility in Columbia Heights. 

According to documents filed in federal court, the property at 530 Berne Road was part of a larger alleged Ponzi scheme to defraud investors by a Pennsylvania company called VBit Technologies.

The company sold investors “mining packages” which included cryptocurrency mining hardware and hosting services. In one offer, for example, it listed equipment bundled with hosting for $111,874.

The idea was that customers were buying actual hardware and software and in essence, property with the promise of wealth.

But the company sold far more contracts than it actually had the ability to handle. For example, according to federal court filings, in 2020 VBit had the capacity to operate no more than 1,000 mining rigs across all data centers it either leased or owned across the U.S.

But it had contracts for 2,700 units.

A year later it had the capacity for 1,700 mining rigs, but it had contracts for 6,800.

To cover its tracks, VBit allegedly set up a customer portal that looked like it was operating the mining facilities when it wasn’t, according to court filings.

In addition, the bitcoin market collapsed in late 2021, which exposed the company’s financial troubles to investors.

Vbit DC Holdings, a subsidiary of the company, did own the property in Columbia Heights, purchasing it for $874,262 according to court filings.

A class action lawsuit is currently underway against the company. Investors accuse founder and former CEO Don Vo of being a conman who posed as a high-tech guru, according to a January 2023 story in the Daily Inter Lake.

One investor, Stephen Ranieri of Las Vegas paid VBit $50,000 for its “Black Diamond” package and then $3,000 each month to maintain computers that company records filed with court documents claim were his wholly-owned property. In all, Ranieri estimated his investment at more than $80,000, he told the newspaper in 2023.

VBit at one point claimed it had sold its company to Advanced Mining for $105 million, according to court filings. But it appears Advanced Mining may not have actually existed and investor’s accounts were locked as they allegedly lost thousands.

Vbit at one point had about 15,000 investors.

Real estate records show that VBit closed the deal on the Columbia Heights location in March 2021. The previous owners described the facility as having a 3.8 megawatt capacity, meaning that it could consume as much electricity as would normally power 3,800 homes in the Flathead Valley, according to a 2023 story.

Jin Gao, who was chairman of the company, is also listed in the class action suit.

A February 2021 video obtained by the Inter Lake at the time shows Gao with VBit founder Vo unpacking computers at the Montana facility. The video was circulated to investors, with VBit showing off its new property as evidence of a thriving crypto enterprise.

The video also shows Teakettle Mining founder Jeff Russell, who sold the Columbia Falls facility to VBit, setting up computers for Vo and Gao.

Now it’s the property of the U.S. government. In May, District Court Judge Gregory Williams declared that U.S. Marshals could enter “and take possession of the defendant property and any property thereon may be disposed of at the discretion of the U.S. Marshal Service.”

The Hungry Horse News tried to call a company that lists itself as the manager of the building, but was unsuccessful in contacting a human as the call went immediately to hold.