Stockholm syndrome? PlexCoin’ fraudsters prefer Canada to US, despite prison sentence in Quebec

Maria Nikolova

PlexCorps’ founders, accused of running a $15 million ICO scam, are busy disputing with US regulators over jurisdiction and depositions.

Human beings’ psyche is complex and another piece of proof of the astonishing ways the logic is pushed through by this complexity comes from the recent statements made by the defendants in an enforcement action taken by the United States Securities and Exchange Commission (SEC) against the participants in an alleged $15 million initial coin offering (ICO) scam.

The case targets PlexCorps aka PlexCoin and Sidepay.ca, Dominic Lacroix and Sabrina Paradis-Royer. These names are known in Canada, as in December last year, the Honorable Judge Marc Lesage of the Superior Court of Quebec today issued a two-month prison sentence and a fine of $110,000 to Mr Lacroix and DL Innov, doing business as PlexCorps and PlexCoin. The verdict was preceded by numerous regulatory warnings against the entities in question.

The actions of the Canadian authorities seem friendlier to the virtual currency scammers as compared to SEC’s actions. In particular, the defendants seem to be upset by SEC’s demands for sanctions over the defendants’ refusal to participate in the discovery process and lack of compliance with Court orders. Thus, for example, 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. Also, the SEC has noted that “The defendants’ remarkable contention that they possess few or no written records related to the PlexCoin ICO further underlines the need for sanctions”.

In a document filed with the New York Eastern District Court late last week, the defendants argue once again that they “cannot agree to sit for open-ended depositions in these tangled circumstances of overlapping jurisdictions and potential civil and/or criminal ramifications – a situation that merely emphasizes that all of these issues are better handled by the Canadian authorities in the first place”.

In summary, the defendants prefer Canada, where the Court has taken numerous actions against them, including issuing a prison sentence, to the United States, where the investigation is still ongoing. In terms of psychology, this resembles to symptoms of the Stockholm syndrome. In this case, an offender develops some sort of affection for the authority that jailed him.

Unless, of course, PlexCoin and its founders consider Canada’s jurisdiction as less harsh and the Canadian regulatory actions – easier to avoid.

In its complaint, filed with the New York Eastern District Court in December last year, the US SEC 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, the complaint alleged.

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