A picture of an illegal bitcoin mine inside a home in Roosevelt, Minnesota. (From lawsuit filed in Roseau County Court)
A Minnesota power company says it has pulled the plug on a scheme that stole hundreds of thousands of dollars worth of electricity.
The apparent mastermind behind it is Ryan Jaenicke, a Roseau, Minnesota, man, who allegedly stole electricity to operate a bitcoin farm in Roosevelt, Minnesota.
The allegations are outlined in a 19 page civil suit filed in Roseau County Court.
North Star Electric Cooperative, based out of Baudette, Minn., is going after Jaenicke and Tina Fehlhaber, two business owners who were once a couple but recently separated.
For the past year Jaenicke has hosted a YouTube segment called, “Degenerate Passive Income,” a channel he says is dedicated to tapping into the power of passive income.
The civil suit accuses Jaenicke of having plenty of passive income by illegally tapping into the power of electricity.
“At the heart of it we see theft and greed,” said Joel Fremstad, the lawyer for North Star.
In many of the videos, Jaenicke talks about crypto currency as a quick way to get rich, showing off some of his bitcoin farms in the Roseau area and around Grafton in North Dakota.
However, the lawsuit alleges a bitcoin farm in Roosevelt was run off stolen electricity from North Star Electric Cooperative.
“Ultimately the losses will be in the hundreds of thousands of dollars,” Fremstad said.
The co-op noticed last year they were losing a “significant” amount of power.
During routine work this spring some workers uncovered the scheme.
North Star was able to trace a line to a home where police found more than two dozen cryptocurrency mining units, fans and other electronic devices in Roosevelt.
Before police could seize the items as evidence, they were gone.
“It is more than you need to run a school for example or commercial building, and this, as I said, was going on for months, if not years, 24 hours a day,” Fremstad said.
The lawsuit says the bitcoin farm was set up at a property owned by Felhaber, Jaenicke’s former girlfriend.
It’s unclear if others may have been involved.
Jaenicke also tried to bribe a North Star employee to help get more power into the home, first with $2,000 and then with $5,000. He was rejected both times.
“He knew what he was doing. Whether he made all the physical connections or just the ‘general contractor’ for this, that’s what we don’t yet know,” Fremstad said.
Multiple attempts to reach Jaenicke, who owns Northland Tire in Roseau, and Felhaber were not successful.
The Roseau County Attorney’s Office reviewed the case last summer and declined to prosecute citing a lack of evidence, noting that decision can be readdressed if more evidence comes up.
This could cost the couple, who just broke up a few weeks ago according to Jaenicke’s YouTube videos, a lot of money.
Fremstad says according to Minnesota law, if found liable, the couple could be forced to pay double the amount of electricity they stole plus any money made off of the crypto mining.
Roosevelt is roughly 130 miles north of Bemidji.