Trendon Shavers, a Texas man who ran a scam investment scheme called Bitcoin Savings and Trust, has been arrested in his home state.

The charges filed against Shavers today are one count of securities fraud and oneof wire fraud, with each havinga maximum penalty of 20 years andpotential fines totaling upwards of $5m.

Shavers, 32, has already been fined $40m by a federal judge in north Texasin a Securities and Exchange Commission (SEC) -related case.This arrest is forcriminal charges of fraud brought by the US Attorney in Manhattan.

By using the online monikers'Pirate' and 'pirateat40', Shavers allegedly sold bitcoin investment opportunities on various online forums.

Calling his schemeBitcoin Savings and Trust (BTCST), Shavers promised a 7% return per week to potential investors.

Shavers was able to amass over 700,000 BTC over a period of time stretching fromSeptember 2011 to September 2012, working on the scam from his home in McKinney, TX. The value of the bitcoin at the time of Shavers' initial SEC chargeswas approximately $64m.

The US Attorney's Office in Manhattan claims 48 of the 100 investors in the BTCSTscam lost some or all of their money.

Shavers' previous SEC case in North Texas created precedent when his attorney claimed bitcoin was not subject to US securities laws that prohibit Ponzi schemes. The judge in that case, however, ruled that the scam had indeed violated thoselaws, which are designed to protect investors from fraud.

Earlier this year, officials in Texas issued a warning in regards to virtual currencies. Joseph Rotunda, director of enforcement at the Texas State Securities Board, indicated that bitcoin has huge trust issues because of little regulatory clarity.

At today's bitcoin prices, the roughly 700,000 BTC Shavers apparently scammed from investors would be worth $243m.

More here:

Bitcoin Ponzi Schemer Charged With Criminal Securities Fraud