ICOs were a major trend a few years back until the point when quite frequently we’d come across scams. One such ICO was PlexCoin, that raised a total of $15 million back in 2017 by duping investors until the Securities and Exchange Commission (SEC) intervened to stop the sale and freeze the assets.
An announcement from the U.S Department of Justice (DOJ) on July 24 now alleges that three individuals, namely Dominic Lacroix, Yan Ouellet, and Sabrina Paradis-Royer, the brains behind PlexCoin, haven been charged on counts of fraud related to the $8 million ICO.
Per the statement, the individuals are residents of Quebec and the charges include wire fraud, conspiracy to commit securities fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering.
The three founders allegedly lured in investors with a misleading campaign and false promise of returns as high as 1,345%.
Last year, the SEC charged the three individuals on allegations of fraud. The guilty were ordered to pay a fine of $7 million while neither confirming or denying the SEC’s allegations.
The current complaint from the DOJ now claims that the individuals took funds from investors by telling them it would be used for the development of the project. However, the individuals used it for personal benefits.
“The indictment states that the first transfer of PlexCoin occurred in August of 2017, and the PlexCoin ICO continued through October of 2017. Court documents show that the defendants and their co-conspirators regularly transferred investor funds from the PlexCoin ICO into fiat currency accounts, and cryptocurrency addresses belonging to themselves for the purpose of daily living expenses and home renovation products. Investors purchased approximately $8,000,000 USD worth of PlexCoin throughout the ICO.”
In a statement related to the case, Justin Herdman, U.S Attorney, said:
“While technologies and the means to make investments may change, one thing remains constant – securities fraud ruins lives and deprives victims of their hard-earned money and savings. Digital currencies are a new type of investment, and just like with traditional securities, you should take the time to research and know exactly what you’re getting into before making any type of investment.”
As The Daily Chain reported last week, the DOJ recently accepted a guilty plea from a 36-year old Californian, for money laundering and illegally operating Bitcoin ATMs.
The guilty allegedly operated HeroCoin, an illegal cryptocurrency exchange service where he charged premiums up to 25% for exchanging funds in return for Bitcoin. In this manner, he went on the launder as much as $25 million, with a major part of the funds coming from illegal activities.
Earlier this month, the DOJ also revealed that it had taken a Houston man into custody for charges of fraud. The alleged applied for PPP loans for the companies “Texas Barbeque” and “Houston Landscaping,” and spent the acquired loans for buying cryptocurrencies on Coinbase.