The regulator asks the New York Eastern District Court to extend the temporary restraining orders, asset freeze orders, and orders against destruction of documents against PlexCoin scammers.
Following the launch of a legal action by the United States Securities and Exchange Commission (SEC) against virtual currency scammers PlexCorps (PlexCoin and SidePay.Ca), Dominic Lacroix, and Sabrina Paradis-Royer last week, the regulator is now seeking extension of certain Court orders against the fraudsters.
On Thursday, December 7, 2017, the SEC filed a Letter with the New York Eastern District Court, asking for an extension of temporary restraining orders, asset freeze orders, and orders against destruction of documents. These orders are set to expire on Tuesday, December 12, 2017. The regulator wants them to be extended until the conclusion of a hearing to show cause.
Let’s explain what this hearing is about. On December 4, 2017, the Court ordered directed the defendants – PlexCorps, Dominic Lacroix, and Sabrina Paradis-Royer, to show cause why an order should not be entered for their permanent enjoinment from violating the Securities Act of 1933, the Securities Exchange Act of 1934, and from participating in any offerings of unregistered securities or otherwise violating Sections 5(a) and 5(c) of the Securities Act.
The defendants should also show cause why the Court should not freeze their assets, and prohibit them from destroying, altering, or concealing documents in their possession, custody, or control.
In its complaint, the US regulator said that it had to take an emergency action to stop Lacroix, a recidivist securities law violator In Canada, and his partner Paradis-Royer from further misappropriation of investor funds illegally raised through the fraudulent and unregistered offer and sale of securities called “PlexCoin” or “PlexCoin Tokens” in a purported “Initial Coin Offering”.
From August 2017 through the present, the defendants have obtained investor funds, purportedly $15 million from thousands of investors, including those throughout the United States and in the Eastern New York District, through materially false and misleading statements.
SEC notes that it appears from the evidence that the defendants have already transferred at least $900,000 of the misappropriated funds from a U.S. Dollar-denominated account controlled by a U.S.-based entity known as Stripe, that at least $810,000 of those funds remain in accounts at Stripe, and that at least some of those funds are currently under Defendants’ control in addresses on cryptographically-secured ledgers or “blockchains”.
SEC adds that evidence suggests that the defendants or their associates have already contemplated destroying evidence relating to the allegations in the complaint.
Along with the extension of the asset freeze and restraining orders, SEC also asks the Court to amend certain parts of the case schedule. For instance, the document production deadline is set to be adjourned from December 5, 2017 to January 22, 2018. The deposition of Lacroix is set to be adjourned for February 5, 2018 and that of Defendant Paradis-Royer is set to be adjourned for February 6, 2018.
The case is captioned Securities and Exchange Commission v. PlexCorps (1:17-cv-07007).