The agency announced on Wednesday that the U.S. Securities and Exchange Commission (SEC) had charged five people and three companies connected to the scam crypto project CoinDeal with fraud.
The SEC alleges that from 2019 to 2022, Neil Chandran, Garry Davidson, Michael Glaspie, Amy Mossel, and Linda Knott falsely claimed that investors putting their money into CoinDeal could generate returns of over 500,000 times their initial investments.
The defendants said CoinDeal would be worth trillions of dollars and sold to a group of “prominent and wealthy buyers.”
“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,” said Daniel Gregus, Director of the SEC’s Chicago Regional Office.
No sale of CoinDeal was ever made, and no investor received any return on their investments.
The defendants instead used millions of dollars of investor money to buy luxurious real estate, cars, and a boat. The SEC estimates that the defendants raised more than $45 million by selling unregistered securities of their fake business. Tens of thousands of investors worldwide were scammed.
The SEC charged the defendants’ three companies, Banner Co-Op Inc., Banners Go LLC, and AEO Publishing Inc., with violating the antifraud and registration provisions of the Securities Act and Exchange Act. The agency seeks disgorgement, pre-judgment interest, penalties, and permanent injunctions against all defendants.
One of the defendants, Chandran, is already in jail waiting for trial in a different fraud case. He falsely claimed to be developing a metaverse project with a native token. The U.S. Justice Department charged Chandran with three counts of wire fraud.
