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