SEC alleges “Meta 1 Coin” scammers continue to make false and misleading statements

The United States Securities and Exchange Commission (SEC) is stepping up its fight against “Meta 1 Coin” scammers, with the regulator claiming that the individuals behind the fraudulent scheme continue to make misleading and false statements to the public.

The US regulator filed a set of documents with the Texas Western District Court on Monday, May 4, 2020. In these documents, seen by FinanceFeeds, the SEC alleges that a recent newsletter by former Washington state senator David Schmidt violated a series of orders issued by the Court.

The regulator quotes the following excerpt of the newsletter sent by Schmidt:

“There have been all kinds of rumors and stories floating around about my status. Please understand that I have to be very careful in the words I use in this communication. I am alive and well and living in my home in Southern Florida. In spite of various stories and reports in various publications and emails, I have not been taken into custody by the powers that be and do not anticipate it happening anytime in the future. While a statement was released by certain authorities of my potential change of living conditions, the top decision makers never followed through with any action.

As requested I submitted a written and private statement to the authorities explaining the scenario and I personally believe they changed their mind after hearing the other side of the story.

There is an intense battle developing in this issue. In my opinion there are certain power structures that want what we are doing stopped. Some very powerful financial advisors have told us we are doing something never done before and if this is fulfilled it can be a threat to the existing power structures.

Let’s just say we have some very good higher placed authorities who understand what we are doing and are totally behind us. This issue takes some time to run through the PTB system and we will be fine in the final outcome”.

According to the SEC, the Newsletter makes a number of materially false and misleading statements to investors and prospective investors in violation of the TRO (temporary restriction order), the PI Order (permanent injunction order), and the Contempt Order, giving the false impression that Mr Schmidt is not going to be arrested and that the Court’s Orders will be ignored.

Additionally, the SEC says that Meta1 has continued to post near-daily videos to its YouTube channel, all of which are publicly available worldwide.

This case alleges an ongoing securities fraud perpetrated by Florida residents Robert Dunlap and Nicole Bowdler, as well as former Washington state senator David Schmidt. The SEC’s complaint alleges that the defendants marketed and sold a purported digital asset called the “Meta 1 Coin” in an unregistered securities offering conducted through the Meta 1 Coin Trust.

The complaint says that the defendants made numerous false and misleading statements to potential and actual investors, including claims that the Meta 1 Coin was backed by a $1 billion art collection or $2 billion of gold, and that an accounting firm was auditing the gold assets. The defendants also allegedly told investors that the Meta 1 Coin was risk-free, would never lose value and could return up to 224,923%. According to the complaint, the defendants never distributed the Meta 1 Coins and instead used investor funds to pay personal expenses and funnel proceeds to two others, Pramana Capital Inc. and Peter K. Shamoun.

According to the complaint, the defendants raised more than $4.3 million from more than 150 investors in and outside the United States.

The Meta 1 Coin Trust, Dunlap, Bowdler, and Schmidt are charged with violating antifraud and securities registration provisions of the federal securities laws. In this action, the US regulator seeks permanent and conduct-based injunctions, disgorgement of allegedly ill-gotten gains with prejudgment interest, and civil penalties against the defendants.