According to its Press Release published on January 4th, 2022, U.S. Securities and Exchange Commision “(SEC) charged the creator of the CoinDeal crypto scheme and seven others in connection with $45 Million fraud.”
The Complaint by SEC
SEC have charged “Neil Chandran, Garry Davidson, Michael Glaspie, Amy Mossel, Linda Knott, AEO Publishing Inc, Banner Co-Op, Inc, and BannersGo, LLC for their involvement in a fraudulent investment scheme named CoinDeal.” This fraud crypto scheme raised more than $45 Million from “sales of unregistered securities to tens of thousands of investors worldwide.”
The companies AEO Publishing Inc, Banner Co-Op, Inc, and BannersGo, LLC were associated with the Chandran fraud and reportedly be the recipients of investors’ cash and crypto payments.
The SEC filed a complaint in the U.S. District Court for the Eastern District of Michigan. In which SEC stated that “Chandran, Davidson, Glaspie, Knott, and Mossel falsely claimed that investors could generate extravagant returns by investing in a blockchain technology called CoinDeal that would be sold for trillions of dollars to a group of prominent and wealthy buyers.”
From January 2019 to 2022, Chandran, Davidson, Glaspie, Knott, and Mossel allegedly disseminated false and misleading statements to investors regarding the proposed value of CoinDeal, the parties involved in the supposed sale of CoinDeal, and the use of investment proceeds. However, “no sale of CoinDeal ever occurred and no distributions were made to CoinDeal investors,” the complaint states.
It further alleges that all the defendants “misappropriated millions of dollars of investor funds for personal use.” Meanwhile, Chandran used investor funds to 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,” he further added.
It must be noted that in June 2022, the U.S. Department of Justice indicted Chandran in the U.S. District Court on three counts of wire fraud and two counts of monetary transaction in unlawful proceeds for his involvement in this crypto fraud scheme. He is alleged to have falsely promised extremely high returns on the premise that one or more of his companies was about to be acquired by a consortium of wealthy buyers.
Moreover, the SEC’s complaint seeks “disgorgement plus prejudgment interest, penalties, and permanent injunctions against all defendants; officer and director bars against Chandran, Davidson, Glaspie, Knott, and Mossel; and a conduct-based injunction against Chandran.”