The US SEC recently announced that it had obtained emergency relief and asset freeze orders against the Meta 1 Coin project. The crypto scam was targeting both American and foreign investors. According to the SEC, a former state senator from Washington was behind the scam. David Schmidt, the former state senator, was working with Nicole Bowdler and Robert Dunlap, both from Florida.
The Allegations
According to the SEC’s complaint, the scammers managed to obtain $4.3 million from investors. They sold them the Meta 1 Coin crypto coin. To lure them in, the scammers promised them that the coin was backed $2 billion in gold assets that were subject to regular audits and $1 billion worth of assets in an art collection.
The three marketed and sold Meta 1 Coin via the Meta 1 Coin Trust. To sweeten the deal, the scammers alleged that investing the project was risk-free. As a result, their investment would never lose value and they stood to make returns of up to 224,923%. However, the scammers never had a coin and thus investors were never sent any Meta 1 Coins. Instead, the scammers used the funds they received for personal expenses. They also funneled some of the funds to Peter K. Shamoun and Pramana Capital Inc.
According to the SEC, the scammers used some of the funds to buy luxury cars, which included a Ferrari valued at $215,000. In total, the investors obtain around $4.3 million from over 150 investors in the US and abroad.
According to David Peavler, the Regional Director of SEC in Fort Worth, the scammers were willing to say anything to obtain funds from unwitting investors. He added that investors must always be skeptical when investing in a project that claims users cannot lose their investment and they will receive unrealistic returns.
The three were charged in the Western District of Texas with violation of anti fraud and securities regulation guidelines and federal securities rules. In its complaint, the SEC was seeking permanent injunctions, disgorgement of any proceeds of crime with interests, and civil penalties against the three. Pramana and Shamoun have also been charged as relief and the SEC is seeking disgorgement of any proceeds of crime with interest.
Crypto Scams Using Renowned Persons
In the crypto world, it is quite common for scammers to use well-known people to steal from their victims. A good example is Steven Seagal, a Hollywood celebrity who recently agreed to settle with the SEC for over $300,000 for his involvement with a crypto scam.
Whenever a renowned personality is mentioned in a crypto project, it is important to be skeptical. For instance, this project was promising returns of up to 224,923%. This should have been enough to set off alarm bells. Any project that makes such promises is probably a scam.
If you are feeling extremely skeptical about a project, you should always avoid it. There will always be other projects, which do not make you feel uneasy about investing your money.
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