The regulator explained that the defendants falsely claimed that Coindeal would “generate investment returns of more than 500,000 times for investors.”
US regulators kick off 2023 with a new round of cryptocurrency-related scam cases. Six individuals and two companies linked to an investment scheme called CoinDeal were indicted Wednesday by the US Securities and Exchange Commission, in the US District Court for the Eastern District of Michigan.
The U.S. Securities and Exchange Commission tweeted that they had “charged Neil Chandran, Garry Davidson, Michael Glaspie, Amy Mossel, Linda Knott, and others for their involvement in a fraudulent investment scheme named CoinDeal that raised more than $45 million from sales of unregistered securities to thousands of investors worldwide.”
SEC Takes Action Against Coindeal Crypto Fraud
The SEC described Coindeal as “a brazen and far-reaching unregistered offer fraud carried out between at least 2018 and 2022”.
The SEC explained that creator Neil Chandran and promoters Garry Davidson, Michael Glaspie, Amy Mossel, and Linda Knott “falsely claimed that investors could make outlandish profits by investing in a Blockchain technology called Coindeal that would sell for trillions of dollars.” to a group of prominent and wealthy buyers.
However, the regulator said that no sale of Coindeal ever took place and no distributions to investors were made. The defendants “collectively misappropriated millions of dollars of investor funds for personal use, and Chandran used investor funds to purchase items such as cars, real estate, and a boat,” the SEC wrote.
Other Parties Involved
The securities watchdog also indicted AEO Publishing Inc., Banner Co-Op Inc., and Bannersgo LLC for their involvement in the fraudulent crypto investment scheme.
Daniel Gregus, director of the SEC’s Chicago Regional Office, explained the following:
“We allege that 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.”
The director added that “as alleged in our complaint, in reality, this was all just an elaborate scheme in which the defendants enriched themselves while defrauding tens of thousands of retail investors.”
Last June, the US Department of Justice (DOJ) charged Chandran with three counts of wire fraud, as well as two counts of money transactions in illicit proceeds in connection with the Coindeal crypto fraud scheme.
The SEC seeks to recover the money allegedly stolen by the defendants, along with pre-judgment interest, penalties, and permanent injunctive relief against all defendants.
The defendants will be prosecuted on charges of violating the anti-fraud and registration provisions of the Securities Law and the Exchange Law.
Among the 100 assets seized by the U.S. Marshals and the FBI had bank accounts, real estate, and luxury cars, including 39 Tesla vehicles.
If convicted in the Justice Department case, Chandran faces twenty years in federal prison.
By Audy Castaneda
