SEC Halts $4.3M “Meta 1 Coin” Crypto Scheme Led by Former State Senator Schmidt

The United States Securities and Exchange Commission (SEC) announced Friday that it had obtained an asset freeze and emergency relief order to halt an ongoing crypto-related fraud that targeted both U.S and foreign investors.

The alleged scheme was masterminded by former Washington state senator David Schmidt, and two Florida residents, Robert Dunlap and Nicole Bowdler.

The accused persons had raised at least $4.3 million from selling a digital asset dubbed Meta 1 Coin, promising investors, among other things that the asset was backed by a $1 billion art collection or $2 billion of regularly audited gold assets.

Additionally, the investors in the unregistered securities offering were told that Meta 1 Coin was ‘risk-free, would never lose value, and could yield returns up to an astonishing 224,923%.’

But according to today’s release by the SEC, investors never got any Meta 1 Coins. Instead, the alleged fraudsters diverted investor funds towards in the Meta 1 Coin Trust towards paying for personal expenses and then funneling remaining proceeds to one entity, Pramana Capital Inc., and a certain Peter K. Shamoun.

The SEC also alleged in its complaint that the defendants spent part of the funds to purchase luxury automobiles, including a $215,000 Ferrari.

With over 150 investors both in and outside the U.S falling victim to the Meta 1 Coin scheme,  the SEC has charged Meta 1 Coin Trust, Dunlap, Bowdler, and Schmidt with violating antifraud and securities registration provisions of the U.S federal securities laws.

There are also charges against Pramana Capital Inc., and Peter K. Shamoun, with the SEC seeking disgorgement of allegedly ill-gotten gains with prejudgment interest.

Meanwhile, in a similar development earlier this year, Coinfomania reported that the U.S charged Boaz Manor, a Canadian-convicted criminal, including two of his businesses, and a business associate, Edith Pardo, with conducting a fraudulent ICO that raised $30 million.

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