By James Davis
US Securities and Exchange Commission (SEC) has started the year with a series of cases targeting crypto scams. The recent case involves five alleged scammers linked to an investment Ponzi scheme called CoinDeal. The five were charged in US District Court for the Eastern District of Michigan yesterday.
According to the SEC Director in the Commission’s Chicago Office, Daniel Gregus, the alleged scammers falsely claimed to have access to high-value blockchain technology and that the sale of this technology would bring returns of 400,000 times for every investor.
SEC Says the Alleged Scammers Violated Provisions of Securities Act
The SEC reports that these scammers operated the CoinDeal scheme from January 2019 to mid-2022. They marketed CoinDeal as a blockchain technology firm. However, the United States regulator has revealed that it was non-existent. As a result, the fraudsters will now appear in court for violating antifraud policies.
The Commission has charged Garry Davidson, Amy Mossel, Michael Glaspie, Linda Knott, and Neil Chandran for their involvement in CoinDeal. SEC says these individuals raised over $46 million from selling unregistered securities to thousands of investors globally.
Gregus says the fraudsters used stolen funds from innocent investors to buy real estate, boats, and cars. He adds that the Commission aims to reclaim the stolen money along with lifetime injunctions against the fraudsters.
Currently, only Chandran is behind bars waiting for trial in a different investment scam case under the Department of Justice. The SEC also charged three firms for their role in the scam. They include Banner Co-Op Inc, BannersGO, and Publishing Inc.
Defendant Chandran Charged in Another Separate Scam Case
As for Chandran, this is not his first run-in with the law. In June last year, he got arrested and charged by the Department of Justice for his involvement in defrauding investors in a different Ponzi scheme.
Chandran falsely claimed to be building a metaverse and its native token at that time. Following his arrest, the FBI and the United States Marshals seized his bank accounts, over thirty Tesla Vehicles, and real estate. If found guilty, Chandran could spend up to twenty years in prison.