Lawsuit Accuses Bitcoin ATM Owner of Smashing Competing Machines With Hammers

A hammer-wielding group involved in the bitcoin ATM business is allegedly smashing its way around Detroit and Chicago in an effort to destroy the competition, according to court documents filed last month and obtained by industry blog CoinDesk.

Andrew Konja, Alvin Konja, Sam Konja, and Odai Mabrouk—along with a number of other co-conspirators—are allegedly running a scheme to put competing bitcoin ATMs out of business in the Detroit and Chicago areas.

Some backstory on Andrew Konja, who's allegedly the ring-leader: He was running his own bitcoin ATM business, the Southfield, Michigan-based MT Group, before either selling it to or merging it with Bitexpress, according to the lawsuit.

The lawsuit, brought to Northern Illinois District Court by SandP Solutions, Inc., also known as Bitcoin of America, claims that the Brothers Konja are deploying a band of lackeys to bash the screens of their competitors, in an effort to put them out of business. The lawsuit claims they've also threatened owners and demanded ransom, which worked on one owner. The lawsuit claims that they told one owner that "he would be shot in the head if he continued to operate bitcoin ATMs in the Detroit metropolitan area."

Bitcoin of America claims the Konjas are responsible for smashing up nearly 20 of their own machines, and as many 70 ATMs of other owners in total. According to the lawsuit, in some instances, after they damaged the machines, some of their goons have approached ATM owners offering to replace them with their own machines.

The whole thing's been coordinated using "sites that automatically destroy posted messages after the passage of time," the complaint notes, making it harder for authorities to track their plans. It is not clear what tool or website the lawsuit is referring to here, or why Bitcoin of America or the police wouldn't be able to document these exchanges, but it does claim it's been going on for at least nine months, and is ongoing.

Konja was interviewed and photographed for the Detroit Free Press in 2015 in a story about bitcoin ATM owners. At the time his business was also called MT Group. Earlier that year he was arrested for possession of a fraudulent transaction device.

Coin ATM Radar estimates total cost of a new Bitcoin ATM at around $10,000-15,000, not including rent and legal guidance. CoinDesk has seen reports of ATM owners making up to $36,000 a year off of these machines.

Bitcoin of America is seeking three times damages. If the machines need to be completely replaced, that's around $600,000, plus court and attorney fees.

Motherboard has reached out to Bitcoin of America and the Chicago and Detroit police departments and will update if they respond.