The United States Securities and Exchange Commission (SEC) charged Neil Chandran and 7 other individuals and entities for orchestrating the fraudulent digital currency financing scheme was known CoinDeal.
The suspects allegedly defrauded investors with around $45 Million over the years and used the money to buy real estate, cars, and a boat.
Halting the Crime
The SEC accused Neil Chandran, Michael Glaspie, Garry Davidson, Linda Knott, Amy Mossel, AEO Publishing Inc, Banner Co-Op, Inc, and BannersGo, LLC of embezzling $45 Million from consumers through their fraudulent entity CoinDeal.
The individuals promised to sell the blockchain-based project to a group of prominent buyers which would guarantee great returns for investors. They likewise deceived them about CoinDeal’s valuation and the corporations involved in the capacity acquisition deal.
The defendants ran their scheme betwixt January 2019 and 2022. CoinDeal’s sale never happened, and investors did not receive any distributions for their engagement in the project. The SEC further maintained that Chandran, Glaspie, Davidson, Knott, and Mossel used the amassed $45 Million to buy cars, properties, and a boat. Daniel Gregus – Director of the SEC’s Chicago Regional Office – commented:
“We allege the defendants falsely claimed access to valuable blockchain tech and that the imminent sale of the technology would generate financing returns of greater than 500,000 times for investors.
As alleged in our complaint, in fact, this was all just an elaborate scheme where the defendants enriched themselves while defrauding tens of thousands of retail investors.”
The United States Department of Justice previously arrested Chandran for offenses related to wire fraud and engaging in illicit money transactions while being part of CoinDeal.
The Commission seeks to impose penalties and permanent injunctions against all defendants. Simultaneously, it insists that Chandran should be a subject of a conduct-based injunction.
The SEC’s Previous Hunt
The American regulating authority launched another investigation against two advisory corporations and their owner – Gabriel Edelman – for running a Ponzi-like digital currency scheme in September last year.
The organizations supposedly operated betwixt February 2017 and May 2021, raising nearly $4.4 Million from investors.
Edelman promised he would invest the financial resources in digital currencies purchased at discounted prices. Nonetheless, he funneled “only a small portion of investor funds in digital assets,” using the rest to buy personal items and send money to family members. The SEC stated in detail how Edelman’s Ponzi scheme worked:
“ For instance, one Investor at the beginning invested $50,000. Edelman returned $75,000 during several months, and the Investor following that invested an extra $600,000. Edelman then returned $720,000 several months thereafter. Following that, the Investor invested $1,000,000– according to purported past performance and Edelman’s promise that the Investor would receive a 15 percent return. Thereafter, Edelman did not return any funds to that Investor.”
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