Orchestrators Of $45M CoinDeal Scam Face Charges
According to reports, the US SEC has, in a report published on January 4th, highlighted the charges against five individuals and three entities involved in the $45 million CoinDeal scam.
The SEC argued that the individuals realized over $45 million from selling unregistered securities to thousands of investors. This is a violation of the Securities Act.
False Claims And Misappropriation Of Funds
The US securities regulator has leveled allegations against many individuals related to the matter, including Amy Mossel, Linda Knott, Garry Davidson, Neil Chandran, and Michael Glaspie.
SEC filed charges against Banner Co-Op, BannersGo LLC, and AEO Publishing Inc. According to SEC, they presented false claims to investors about the profitability of investing in blockchain technology through CoinDeal.
They asserted that clients could utilize the profit from the investment to purchase countless assets. The watchdog in the report added that the eight defendants made these false claims from January 2019 till 2022.
Furthermore, the defendants reportedly failed to inform investors that CoinDeal did not plan to share the profit with investors. Consequently, the report claims that these individuals misused investors’ funds.
For instance, they supposedly lavished millions on buying luxury items such as boats, cars, and real estate. Meanwhile, the director of SEC’s regional office in Chicago, Daniel Gregus, responded to the incident by saying:
“The defendants misguided investors into believing they had access to high-value blockchain technology.”
Using Investors’ Funds To Buy Luxury Goods
In addition, Gregus said the defendants told investors that the impending sale of the technology would provide returns for investors in more than 500,000 times their initial investment.
“According to the allegations in our lawsuit, all of this was nothing more than an intricate plan through which the defendants profited themselves while simultaneously scamming thousands of retail investors,” he added.
Earlier in June 2022, the US DoJ charged Chandran with three counts. The 3-count charges include two counts of illegal money transfer and one count of wire fraud in Nebraska’s District Court, defrauding over 10,000 unsuspecting investors in a separate scheme.
In the scheme, Chandran claimed to be developing a native cryptocurrency for a metaverse project. Those in charge of the investigation include Caryn Trombino, Steven Trombino, and Dante Roldan from the SEC’s Chicago office.
Others include Ana D. Petrovic and Paul Montoya, who are acting as Florida supervisors. The leader of the case is Michael Foster from Chicago. This development is another dent to the crypto sector as more cases of alleged crypto fraud continue to emerge.
These bad actors continue to paint the crypto sector in a bad light despite the immense capability of crypto and the technology behind it.
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