Federal grand jury indicts trio behind phony cryptocurrency PlexCoin - FinanceFeeds

Federal grand jury indicts trio behind phony cryptocurrency PlexCoin

Maria Nikolova

Dominic Lacroix, Yan Ouellet, and Sabrina Paradis-Royer are charged with conspiracy to commit securities fraud and wire fraud, wire fraud, and conspiracy to commit money laundering.

United States Attorney Justin Herdman announced on Friday that a federal grand jury sitting in Cleveland has returned a five-count indictment charging Dominic Lacroix, Yan Ouellet, and Sabrina Paradis-Royer, all of Quebec, Canada, with conspiracy to commit securities fraud and wire fraud, wire fraud, and conspiracy to commit money laundering.

According to the indictment, from May 2017 to December 2017, the defendants conspired together to induce investors to purchase PlexCoin, a cryptocurrency offered through an entity known as PlexCorps. The cryptocurrency would become available to investors during an ICO or Initial Coin Offering. The defendants intended to use the ICO as a way to defraud investors and enrich themselves.

To carry out their alleged scheme, the defendants and their co-conspirators marketed and promoted PlexCorps and the PlexCoin ICO to the public, including investors within the Northern District of Ohio, via social media and publicly accessible Internet websites.

The indictment states that the defendants made numerous false claims about PlexCorps and PlexCoin in order to obtain digital and fiat currency from investors, including that PlexCorps’ management consisted of a global “team” of financial, managerial and other subject-matter experts headquartered in Singapore; the proceeds of the PlexCoin ICO would be used to develop other PlexCorps products; and that investors would receive significant returns for their initial investment. The defendants are also alleged to have omitted certain materials facts about the ownership and operations of PlexCorps to conceal their true intent.

According to the indictment, around June 2017, PlexCorps began promoting PlexCoin to the public as a new digital cryptocurrency that would be available through an upcoming ICO. Around August 2017, PlexCorps published a whitepaper for PlexCoin entitled “PlexCoin: The Next Cryptocurrency” (“Whitepaper”), which was available for review on the internet by potential investors. This Whitepaper contained numerous false claims, including that some investments in PlexCoin could result in a 1,354% return.

This Whitepaper explained that funds raised through the PlexCoin ICO and pre-sale would be used to further the maintenance and development of PlexCoin and, later on, allow for PlexCorps to offer additional products and services for sale.

Investors were permitted to begin investing in PlexCoin in August of 2017. During the ICO, investors purchased PlexCoin using a variety of methods, including digital currency, such as Bitcoin, Ether and Litecoin, to wallet addresses on a blockchain. Investors also tendered fiat currency, including USD and Canadian dollars (CAD), and provided credit card information through payment portals available on the PlexCoin website or through U.S.-based online payment processors such as PayPal, Square, or Stripe.

Investors purchased approximately US$8 million worth of PlexCoin throughout the ICO.

Let’s recall that the Securities and Exchange Commission (SEC) has also brought a lawsuit against the individuals associated with PlexCorps.

Read this next

Industry News

John McAfee indicted on crypto fraud charges

This is only the first case brought by the CFTC for a manipulative scheme involving digital assets

Industry News

ASIC announces regulatory costs ahead of CFD trading restrictions

The Australian regulator “is acutely aware of the challenges facing many businesses due to COVID-19”, but made no reference to the challenges FX and CFD brokers will face amid the leverage restrictions.

Industry News

Top lawyers say 2021 will be record year for AML penalties

Federal regulators have imposed more than $200 million in penalties on corporations, just in the last two months.

Industry News

Swedish crypto conman pleads guilty to $16 million scam

Karlsson was extradited from Thailand and is facing a maximum sentence of 20 years for the wire fraud and securities fraud charges and another 20 years for the money laundering charge.

Industry News

ESG premium on corporate bonds of +5bps in Europe

The top issuers of ESG bonds and loans in 2020 were France, Germany, and Luxembourg, compared to France, the UK, and Spain in 2019.

Technology

Finastra gains access to NICE Actimize AML and fraud solution

The AI-powered platform provides AML and fraud solutions, with real-time behavioral analytics and machine learning capabilities.

Industry News

A new dawn in stock trading is here. Your brokerage should embrace it!

London looks set to capitalize on the latest global equities trend of Spacs – This could well be the new trend for electronic trading firms. We investigate how.

Industry News

SEC launches Climate and ESG Task Force

The task force will develop initiatives to identify ESG-related misconduct and use data analysis to mine and assess information across registrants, to identify potential violations.

Industry News

Mobile trading takes center stage: Is your brokerage doing what it takes?

Mobile trading has grown in popularity in recent years to the point it became indispensable for the trading industry. The lifestyle changes and mass retail adoption amid the COVID-19 pandemic made sure there is no going back.