As reported by Kotaku, several people have come forward with very similar stories: "Rack" reaches out to them via the in-game chat with an intriguing offer that should smell fishy to anyone who's accustomed to scams. Basically, he was asking them to make a one-time "investment" that he promised to pay back, with interest, very quickly. And since this was coming from someone who was apparently a well-known and well-loved member of the community, people actually took him up on it.
The first person to call him out on this was YouTuber Tyceno, who wrote this on Twitter:
“I have strong reason to believe @StepBackRack is the man behind a huge illegal pyramid scheme that took place in the NBA 2K community, in which over $200,000 got taken from young vulnerable victims believing they could ‘flip’ their money."
But Rack wasn't the only person involved with this crime. Apparently, another popular player, Raangee, got involved, making a website and a FAQ that hoped to give this whole practice an air of legitimacy. One of the first questions in this FAQ insisted that this wasn't illegal. Which is always a heartening sign.
Anyway, when 'investors' tried to follow up with Rack, he would always claim bank problems or PayPal woes were responsible for his failure to pay back. He also said that anyone who talked about what was going on wasn't getting paid back, so, that's not suspicious at all.
Whether this is a case of stolen identity, hacking, or a Twitch persona going bad, two things are certain: he's going to claim he was hacked, and you really should be more careful with your money.