The Securities and Exchange Commission has announced charging several individuals involved in the fraudulent investment scheme named CoinDeal that raised more than $45 million from selling unregistered securities. The defendants include Neil Chandran, Garry Davidson, Michael Glaspie, Amy Mossel, Linda Knott, AEO Publishing Inc, Banner Co-Op, Inc, and BannersGo, LLC.
The US regulator alleges in its complaint that Chandran, Davidson, Glaspie, Knott, and Mossel convinced investors that they could generate large returns through the blockchain technology CoinDeal that would be sold for trillions of dollars to a group of “prominent and wealthy buyers”. From January 2019 to 2022, the defendants spread misleading statements about the value of CoinDeal, the parties involved in the supposed sale of CoinDeal, and the use of investment proceeds.
According to SEC, CoinDeal was never sold and no distributions were made to its investors. Furthermore, the defendants misappropriated millions of dollars of investor funds for personal use. Chandran even used the investment funds t buy cars, real estate, and a boat.
Daniel Gregus, Director of the SEC’s Chicago Regional Office, said:
We allege the defendants falsely claimed access to valuable blockchain technology and that the imminent sale of the technology would generate investment returns of more than 500,000 times for investors. As alleged in our complaint, in reality this was all just an elaborate scheme where the defendants enriched themselves while defrauding tens of thousands of retail investors.
In SEC’s current complaint, the defendants are charged with violating the antifraud and registration laws. Chandran was indited in June last year in US District Court for the District of Nebraska on three counts of wire fraud and two counts of monetary transaction in unlawful proceeds for his involvement in CoinDeal.
The US regulator is seeking disgorgement and pre-judgment interest, penalties, and permanent injunctions against all defendants, as well as officer and director bans against Chandran, Davidson, Glaspie, Knott, and Mossel.
