SEC seeks help from Quebec Superior Court in ICO scam case

The United States financial regulators keep up with their efforts to tackle cryptocurrency-related fraud. As FinanceFeeds reported back in December 2017, the Securities and Exchange Commission (SEC) has launched a lawsuit against scammers PlexCorps aka PlexCoin and Sidepay.ca, Dominic Lacroix and Sabrina Paradis-Royer at the New York Eastern District Court over an alleged $15 million initial coin offering (ICO) scam.

The Commission noticed the depositions of Lacroix and Paradis-Royer, as well as of current and former employees of PlexCoin, to take place between February 21 and February 23, 2018, at the Commission’s offices in New York, but the witnesses did not appear in New York. Commission counsel has proposed to travel to Quebec to take the noticed depositions, but neither Lacroix nor Paradis-Royer nor the employees have agreed to appear.

That is why, on Friday, February 23, 2018, the Securities and Exchange Commission moved the New York Eastern District Court to issue a Request for International Judicial Assistance to the Quebec Superior Court, District of Quebec City in the Province of Quebec. In particular, the SEC is requesting the assistance of that Court to compel the attendance of witnesses at oral depositions and the production of documents.

The documents requested from defendants Lacroix and Paradis-Royer include all communications or documents concerning any contacts between the defendants and the United States with respect to PlexCorps and the PlexCoin ICO.

In addition, the Commission has learned that certain current and/or former employees of PlexCoin, including Yan Ouellet, Daphnée Verdon-Martin, and Antoine Richard, may have information relevant to the claims against the defendants, as well as information relevant to personal jurisdiction. The SEC has learned that these individuals may have information regarding, among other things, the efforts made by the defendants to avoid contacts with the United States. For example, Ouellet may have assisted Lacroix in (a) setting up and/or running PlexCorps’ and PlexCoin’s websites; (b) keeping track of the individuals who accessed the websites, including the identity of regulators and law enforcement agencies; and (c) opening accounts with and making a phone call to a payment processing vendor in the United States.

That is why, the Commission is asking the Quebec Court to compel Ouellet, Verdon-Martin, and Richard, who are all residents of the Province of Quebec, Canada, to comply with document requests.

The SEC’s Complaint alleges, among other things, that PlexCoin and the other defendants in this case misled investors in connection with the offer and sale of digital assets known as PlexCoins, in the United States, including with misstatements and omissions about the PlexCorps “team” size, expertise and place of business, and about the true use proceeds of the PlexCoin Initial Coin Offering.

Let’s note that Letters Rogatory are an established procedure by which Canadian and United States courts assist each other in obtaining evidence relevant to pending judicial proceedings.

The case is captioned Securities and Exchange Commission v. PlexCorps (1:17-cv-07007).