PlexCoin scammers claim they have few or no written records related to own ICO – SEC wants sanctions
The defendants have decided that they were excused from complying with Court orders, SEC argues.
The United States Securities and Exchange Commission (SEC) is seeking sanctions against virtual currency fraudsters who have repeatedly chosen not to comply with discovery orders.
In a Letter to Judge Carol Bagley Amon of the New York Eastern District Court, the SEC requests discovery sanctions against Dominic Lacroix and Sabrina Paradis-Royer, the individuals behind PlexCoin. Let’s recall that in December last year, the US regulator took action against PlexCorps aka PlexCoin and Sidepay.ca, Dominic Lacroix and Sabrina Paradis-Royer, over an alleged $15 million initial coin offering (ICO) scam.
On Wednesday, March 14, 2018, the Commission informed the Court that the defendants have repeatedly refused to participate in the discovery process and have not complied with Court orders.
For example, the defendants had concerns about traveling to the US, so, to accommodate these concerns, the Commission offered to travel to depose the defendants in Canada. But, Dominic Lacroix and Sabrina Paradis-Royer continued to resist compliance, requesting next that the Canadian authorities should not be permitted to attend the depositions or have access to any deposition transcripts. Counsel for the Commission indicated it would not oppose these requests with certain limitations but, still, the defendants refused to participate.
On Monday, March 12, 2018, the defendants informed the Commission that they would not sit for depositions in Canada, supposedly on account of the parties’ differing views on what questions are relevant to personal jurisdiction.
With regard to the requests for production, the defendants have stressed that the Canadian authorities seized their electronic devices on August 2, 2017 and, hence, they were not in possession of certain documents. Instead, they eventually produced 126 pages, consisting mostly of the PlexCoin whitepaper and documents filed by the Canadian authorities in connection with the August 2 seizure. However, the defendants did not provide other documents – that is, the requested documents related to the PlexCoin ICO. The defendants also have not produced a copy of the affidavit they referenced during the court conference on January 9 – or even definitely provided the name of the affiant.
“The defendants’ remarkable contention that they possess few or no written records related to the PlexCoin ICO further underlines the need for sanctions”, SEC says.
The Commission explains that although the defendants’ computers were seized by the Canadian authorities on August 2, 2017, the PlexCoin sales, including to US investors, occurred thereafter. According to the regulator, the defendants created responsive electronic records after August 2, 2017, in the process of continuing the PlexCoin ICO.
The list of discovery sanctions includes (inter alia) treatment of the non-compliant actions as contempt of Court, issuing of protective orders, striking a part (or the whole) pleadings, issuing of default judgements against the non-compliant party, as well as payment of certain expenses.
The case is captioned Securities and Exchange Commission v. PlexCorps (1:17-cv-07007).
