NY Court grants US Govt request for stay of SEC action against Ponzi scammer Renwick Haddow

Judge Lorna G. Schofield of the New York Southern District Court has granted a request by the United Sates Government to stay a civil action against Ponzi scammer Renwick Haddow. The order, signed by the Judge late last week, directs that the case brought by the Securities and Exchange Commission (SEC) against Haddow be stayed stay until the conclusion of the related criminal case, United States v. Renwick Haddow, 17 Mj. 4939.

The United States shall file a status letter on September 3, 2018, and every 60 days thereafter, updating the Court on the status of the criminal case.

The Criminal Case against Haddow stems from the same set of facts and circumstances that have led to the launch of the Civil Action. The Government has argued that a full stay is appropriate because any exchange of discovery would be asymmetrical and would merely allow the defendant to circumvent the criminal discovery rules and improperly tailor his defense in the Criminal Case.

The Government and the public are said to have an important interest in insuring that civil discovery is not used to circumvent the restrictions that pertain to criminal discovery — restrictions that, inter alia, preserve the truth-seeking functions of the criminal process by restraining the ability of criminal defendants to tailor testimony, suborn perjury, manufacture evidence, or intimidate witnesses.

Haddow was arrested by US authorities on April 13, 2018, following his extradition from Morocco. On July 13, 2018, the Honorable James L. Cott, United States Magistrate Judge, signed an order continuing the case in the interest of justice and extending the Government’s time to proceed via indictment or information until August 13, 2018.

Upon the filing of an information or indictment in August, the Government anticipates that the assigned judge will schedule a conference during which a trial date will be set.

Both the Criminal Case and the Civil Action allege that from November 2014 through June 2017, Haddow participated in a scheme in which he solicited investments in start-up companies he created and controlled, including Bitcoin Store (a purported online platform for Bitcoin trading) and Bar Works (an entity that claimed it was adapting former restaurants and bars into co-working spaces), making material misrepresentations about each business as he did so.

Haddow concealed his interest in Bitcoin Store and fabricated the purported “experienced team of leading investment professionals” working at the company. As to Bar Works, Haddow adopted the alias “Jonathan Black” to hide his role in the scheme, and claimed that “Jonathan Black” had an extensive background in finance. Haddow concealed his identity because, by July 2013, the United Kingdom’s Financial Conduct Authority (FCA) had brought a civil action against Haddow and others for allegedly running various unauthorized collective investment schemes involving, among other things, misleading statements to investors.

The defendant solicited investments through his control of InCrowd Equity Inc., which claimed it was a type of crowdfunding portal through which investors could purchase shares of start-ups supposedly vetted by the portal. Haddow did so without disclosing to investors that he had ownership interests in both InCrowd on one hand and the companies to be invested in on the other. Haddow also misappropriated without permission funds purportedly involved in Bitcoin Store and Bar Works for his own use and the use of persons associated with him.

The civil case against Haddow is captioned Securities and Exchange Commission v. Haddow et al (1:17-cv-04950).