The Internet seems to have provided fertile ground for securities fraud that depends upon unsophisticated investors making payments without the means to investigate the alleged scheme. The Securities and Exchange Commission (SEC) recently filed a complaint charging several individuals with participation in a fraudulent investment scheme.
The allegations of fraud
The five defendants are alleged to have promised extraordinary returns on investments in CoinDeal, which was advertised as a unique blockchain technology that would soon sell for trillions to reputable billionaire buyers. According to the SEC, CoinDeal’s website describes the firm as a cryptocurrency exchange.
One of the defendants is currently imprisoned and is awaiting trial. The SEC alleges that this defendant recruited others to help him sell unregistered securities to largely unsophisticated investors.
One of the remaining defendants received a cease and desist warning from Alabama regulators for selling unregistered securities. The complaint alleges that the defendants, including an online promoter, raised huge sums for CoinDeal in multiple states and countries. The individual defendants are alleged to have sold or advertised CoinDeal shares for sale knowing that representations about the stock’s predicted profits were false or unreliable.
Where did the money go?
The SEC alleges that the money trail led to purchases made with investor funds that were used for boats, homes and other luxury goods for the suspects.
In its complaint, the SEC is seeking disgorgement of funds received from potential investors, bars to future participation in the sale of securities by the officers and directors of CoinDeal and various injunctions preventing the defendants from participating in any similar transactions.
Anyone who is accused of a crime has the right to a defense. When they are accused of sophisticated crimes, they need the help of attorneys who have experience with complex evidence.