The Securities and Exchange Commission (SEC) has charged a high-profile American lobbyist and the creator of AML Bitcoin with illegally profiting from defrauding customers through an ICO that raised $5.6 million through soliciting investors from the US and abroad.
Jack Abramoff, who returned to lobbying after serving four years in prison for bribing government officials, was charged with having links to a proposed new cryptocurrency called AML Bitcoin. The SEC alleges that Nevada-based NAC Foundation and its CEO Marcus Andrade conspired with Abramoff to make false and misleading statements to 2,400 purchasers by selling tokens that could later be converted to AML BitCoin.
Andrade and Abramoff touted the proposed coin as superior to the original bitcoin and that it would prevent money laundering and anonymous use through “biometric technologies.”
The SEC also charged the defendants with providing pool participants with false statements that misrepresented the AML BitCoin potential, claiming that Abramoff arranged for NAC to pay for independent articles to misleadingly promote the coin.
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On top of these charges, prosecutors accused the ICO organizers of deploying elaborate tactics, and numerous false statements, including that multiple government agencies, were negotiating to use AML BitCoin. They also misled purchasers through various claims to fund the venture, including that their technology would allow the AML Bitcoin cryptocurrency to comply with anti-money laundering and know-your-customer regulations.
The scam operatives further claimed that they were going to be aired during the 2018 Super Bowl television broadcast, despite the fact that NAC was unable to afford the cost of the ad.
Instead, they spent the pool’s monies to pay for their personal expenses, including $1.1 million that was transferred to Andrade’s account after he managed a market manipulation strategy to boost the token’s trading volume and price.
In a parallel criminal case brought by the Justice Department, Jack Abramoff has been charged with conspiracy to commit wire fraud and violating the Lobbying Disclosure Act, which requires lobbyists representing domestic clients to register with Congress. A federal jury in San Francisco also indicted Marcus Andrade for wire fraud and money laundering.