According to the Q4 Anti-Money Laundering (AML) report 2019, the total amount of funds lost to frauds and thefts stands at $4.1 billion. The lack of awareness amongst people and with no proper regulations in place, the crypto industry is having a hard time getting rid of these criminals that have been plaguing the industry for years.
The United States Securities and Exchange Commission (SEC) has been actively watching over the crypto industry to intervene in such scenarios. Recently, Jack Abramoff, founder of AML Bitcoin and a disgraced Washington lobbyist from former President George W. Bush’s administration, has been charged for conducting a fraudulent offering.
According to the complaints, Rowland Marcus Andrade made illegal token sales via his Nevada-based company called the NAC foundation. The foundation allegedly raised more than $5.6 million in an ICO for AML Bitcoin from August 2017 and throughout 2018, during the time when ICO’s were trending.
The charges filed in San Francisco on June 22 mention a “Co-Schemer” without mentioning any names. However, the recent charges filed by the SEC reveal that the person in question is none other than the notorious lobbyist Jack Abramoff, who has previously faced some jail time for corruption.
The SEC accuses Abramoff of aiding Andrade in his endeavors of promoting the ICO that turned out to be a scam. Besides duping investors and lying to them about the technicalities behind AML Bitcoin, Andrade also purportedly used millions of dollars in investor funds for personal expenses like his own house.
A part of the SEC’s filing read:
“NAC and Andrade falsely claimed that multiple government agencies were negotiating to use AML BitCoin, and Abramoff and Andrade falsely claimed that they were on the verge of advertising AML BitCoin during the Super Bowl in an effort to create interest in the offering, despite NAC being unable to afford the cost of the ad.”
Back in 2019, the SEC had also published a framework for crypto firms to help determine whether a token should be considered a security or not. The regulator has also charged the NAC for ignoring its guidelines.
“We allege that these defendants repeatedly misled investors into funding non-existent technology, falsely claiming that the technology would make digital asset transactions more secure,” said Kristina Littman, the chief of the cyber division at the SEC.
AML Bitcoin’s advertisements were based on it being compliant with the regulations along with providing anti-money laundering support. What’s ironic is that the charges against AML Bitcoin in San Francisco include one count of money laundering and one count of wire fraud, both carrying 20 years of prison time.
As of now, U.S. Attorney David Anderson has revealed that Abramoff, 61, of Silver Spring, Maryland, has pleaded guilty to the charges against him in the AML Bitcoin case and will face up to five years in prison.