The US Government wants to stay the civil action against Haddow until the completion of the parallel criminal case.
The United States Government is seeking to intervene in the civil case against Ponzi scammer Renwick Haddow. Several documents, filed with the New York Southern District Court today, state the Government’s request to intervene in the civil case brought by the Securities and Exchange Commission (SEC), and to stay this civil action in its entirety until the completion of the trial or other disposition in the parallel criminal case.
The Criminal Case against Haddow arises from the same set of facts and circumstances that underlie the Civil Action. As a result, according to the Government, a full stay is appropriate because any exchange of discovery would be asymmetrical and would merely allow the defendant to circumvent the criminal discovery rules and improperly tailor his defense in the Criminal Case.
The Government and the public are said to have an important interest in insuring that civil discovery is not used to circumvent the restrictions that pertain to criminal discovery — restrictions that, inter alia, preserve the truth-seeking functions of the criminal process by restraining the ability of criminal defendants to tailor testimony, suborn perjury, manufacture evidence, or intimidate witnesses.
The defendant was arrested by US authorities until April 13, 2018, upon his successful extradition from Morocco. On July 13, 2018, the Honorable James L. Cott, United States Magistrate Judge, signed an order continuing the case in the interest of justice and extending the Government’s time to proceed via indictment or information until August 13, 2018.
Upon the filing of an information or indictment in August, the Government anticipates that the assigned judge will schedule a conference during which a trial date will be set.
As alleged in both the Criminal Case and the Civil Action, from November 2014 through June 2017, Haddow participated in a scheme in which he solicited investments in start-up companies he created and controlled, including Bitcoin Store (a purported online platform for Bitcoin trading) and Bar Works (an entity that claimed it was adapting former restaurants and bars into co-working spaces), making material misrepresentations about each business as he did so.
Haddow concealed his interest in Bitcoin Store and fabricated the purported “experienced team of leading investment professionals” working at the company. As to Bar Works, Haddow adopted the alias “Jonathan Black” to hide his role in the scheme, and claimed that “Jonathan Black” had an extensive background in finance. Haddow concealed his identity because, by July 2013, the United Kingdom’s Financial Conduct Authority (FCA) had brought a civil action against Haddow and others for allegedly running various unauthorized collective investment schemes involving, among other things, misleading statements to investors.
The defendant solicited investments through his control of InCrowd Equity Inc., which represented itself as a type of crowdfunding portal through which investors could purchase shares of start-ups supposedly vetted by the portal. Haddow did so without disclosing to investors that he had ownership interests in both InCrowd on one hand and the companies to be invested in on the other. Haddow also misappropriated without permission funds purportedly involved in Bitcoin Store and Bar Works for his own use and the use of persons associated with him.
The counsel for Renwick Haddow has advised the Government that the defendant consents to the Government’s motion to intervene and for a complete stay of the civil action. The Securities and Exchange Commission does not object to this motion either.