Digital Assets: SEC Busts Crypto Scam That Promised 224,923% Return

March 24, 2020 | Digital Assets, News
https://dailyalts.com/wp-content/uploads/2020/03/invest-meta1-coin-img2-crypto-scam.jpg

A former state senator and two others are in the dock for Meta 1 Coin fraud.

The SEC has put a stop to an audacious crypto con scheme that raised $4.3 million from around 150 investors, both in the U.S. and abroad. It alleged that former Washington state senator David Schmidt and Florida residents Robert Dunlap and Nicole Bowdler conspired in the Meta 1 scam. (CoinDesk)

Meta 1: Tall claims

The defendants allegedly floated a scheme to sell “Meta 1 Coins” in an unregistered securities offering. It was conducted through the Meta 1 Coin Trust.

The fraudsters attracted investors to the scheme through various, scandalous claims. They assured investors that their Coin was backed by a $1 billion art collection or $2 billion of gold. Further, they said that an accounting firm was auditing the gold assets.

Schmidt and Co promised investors of an unbelievable 224,923% return on investment. It was a classic example of “too good to be true.”

They also claimed the investment was risk-free and would never lose value.

“As we allege, the defendants made audacious claims about the Meta 1 Coin and would say almost anything to separate investors from their money,” said David Peavler, Regional Director of the SEC’s Fort Worth Regional Office.  “Investors should always look skeptically at promoters who claim that their investment cannot lose value or that investors will receive massive returns.”

Extract from the scam website:

“What is META 1 Coin?

META 1 Coin a Private Digital Currency Secured by Humanities greatest expressions of Life. META 1 Coin is a coin for Humanity and built on the framework of abundance by smart contracts unbreachable on the blockchain ensuring appreciation and never devaluation…”

Money spent on the high life

The SEC alleges that the investors never saw their money again. The conspirators instead routed the funds to Pramana Capital, a Chicago-based fund, and another individual, Peter Shamoun. Ultimately, the defendants blew up the money on personal expenses and luxury cars such as a $215,000 Ferrari.

SEC seeks disgorgement of fraudulent gains

The SEC has sought a refund of monies to the investors together with interest, civil penalties, and injunctions against the perpetrators.

Related Story:  Three Men Netted in $722 Million Crypto Mining Fraud                                                

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Alt Insights

January 29, 2020

Venture Capital: The Kobe in “Bryant Stibel & Co”

Venture Capital: The Kobe in “Bryant Stibel & Co”
Shape

Latest Alternative Investment News

Alternative Investments: Activists Will Get Busy Soon, Says Tim Melvin

As companies become more undervalued as the economy slows because of shutdown orders across the United States, I expect that the pace of activist activity to increase. We should see…

https://dailyalts.com/wp-content/uploads/2020/04/54e5d0424b54b10ff3d8997cc3213f771737c3e456597441702a7cd297_640.jpg
Private Equity: Active Triage Happening at KKR and Other Funds
April 2, 2020     News, Private Equity

KKR & Co (NYSE: KKR) has shelved a plan to sell Singapore-based Goodpack, a Singapore based shipping containers, and logistics services.  They had bids for the company that was said…

https://dailyalts.com/wp-content/uploads/2020/04/key-visual-kyash.jpg
FinTech: Kyash Closes $45M Series C Funding
April 2, 2020     FinTech, News

Kyash, a Japanese fintech startup aspiring to be a leading challenger bank, gained $45 million in a Series C funding. The round was co-led by Greenspring Associates and Goodwater Capital,…

https://dailyalts.com/wp-content/uploads/2020/04/dollar-1362244_640-mmfs.jpg
Liquid Alternatives: Investors Shovelled $677B Into Money Market Funds In Scramble to Safety
April 2, 2020     Liquid Alternatives, News

Investors set up a record-breaking first quarter this year for inflows into U.S. money market funds. These funds gained from the massive risk-off sentiment that prevailed as investors realized the…

Scroll to Top