The Securities and Exchange Commission (SEC) charged eight individuals for involvement in a fraudulent investment scheme which raised more than $45 million from the sale of unregistered securities for a fake crypto company called CoinDeal.
According to the SEC’s complaint filed in the U.S. District Court for the Eastern District of Michigan, Neil Chandran, Garry Davidson, Michael Glaspie, Amy Mossel, and Linda Knott – along with corporate entities AEO Publishing Inc, Banner Co-Op, Inc, and BannersGo, LLC – falsely claimed that investors could generate extravagant returns by investing in a blockchain technology called CoinDeal that would be sold for trillions of dollars to a group of prominent and wealthy buyers.
From at least January 2019 to 2022, Chandran, Davidson, Glaspie, Knott, and Mossel allegedly disseminated false and misleading statements to investors regarding the purported value of CoinDeal, the parties involved in the supposed sale of CoinDeal, and the use of investment proceeds. According to the complaint, no sale of CoinDeal ever occurred and no distributions were made to CoinDeal investors.
The complaint further alleges that the defendants collectively misappropriated millions of dollars of investor funds for personal use, and that Chandran used investor funds to purchase items such as cars, real estate, and a boat.
“We allege the defendants falsely claimed access to valuable blockchain technology and that the imminent sale of the technology would generate investment returns of more than 500,000 times for investors,” said Daniel Gregus, director of the SEC’s Chicago Regional Office. “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.”
The SEC’s complaint seeks disgorgement of illegally gained profits plus pre-judgment interest, penalties, and permanent injunctions against all defendants; officer and director bars against Chandran, Davidson, Glaspie, Knott, and Mossel; and a conduct-based injunction against Chandran.