Former Washington senator busted by SEC over cryptocurrency scam
Questions now surface about how the politician may have operated scams while in office
The cryptocurrency industry is still relatively new and it’s still not difficult to be exposed to scams and robberies from people who want to take advantage of users getting the first strokes of the market. Luckily, the Securities and Exchange Commission (SEC) just stopped a cryptocurrency scam that was developing and that had a former Washington state senator as the culprit. Former senator David Schmidt along with two Florida residents, Nicole Bowdler and Robert Dunlop, acted together through Clear International Trust to scam investors out of millions of dollars
The SEC included in its accusation against the trio Pramana Capital and Peter Shamoun as relief defendants. The commission filed a lawsuit against all of them in the Western District of Texas, accusing them of encouraging investors to put money on an alleged cryptocurrency called Meta 1 Coin Trust. This investment opportunity was presented to investors in an unregistered initial coin offering (ICO). Schmidt, along with the two other defendants, was making several false and misleading statements about this digital coin, claiming that this cryptocurrency was backed by either a $1 billion art collection or $2 billion of gold that was being audited by an accounting firm. On top of that, they told the investors that Meta 1 Coin was never going to lose its value and that the return of investment could be up to 224, 923%.
It was a straight-up scam; the defendants raised close to $4.8 million from 150 investors located in the US since it started back in April 2018. There was never a digital currency distribution among investors. All funds were used by the defendants to pay for personal expenses and to fund Pramana Capital. SEC Fort Worth Regional Office Director David Peavler said in a statement, “As we allege, the defendants made audacious claims about the Meta 1 Coin and would say almost anything to separate investors from their money. Investors should always look skeptically at promoters who claim that their investment cannot lose value or that investors will receive massive returns.”