SEC halts “Meta 1 Coin” scam perpetrated by former state senator

The United States Securities and Exchange Commission (SEC) has managed to secure an asset freeze order and other emergency relief to stop 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 SEC’s complaint, filed in the Western District of Texas (Austin Division) on March 16, 2020, and unsealed on March 20, 2020, charges the Meta 1 Coin Trust, Dunlap, Bowdler, and Schmidt 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. The complaint also charges Pramana and Shamoun as relief defendants and seeks disgorgement of allegedly ill-gotten gains with prejudgment interest.