Virtual currency scammer gets 33-month prison sentence
Patrick McDonnell, head of Coin Drop Markets, was sentenced to 33 months of imprisonment for wire fraud.
Patrick McDonnell who last year pleaded guilty to wire fraud in connection with a scheme to defraud investors in virtual currency, got a 33-month prison sentence on Thursday.
The Federal court in Brooklyn issued the sentence. In addition, McDonnell was ordered to pay $224,352 in restitution.
According to the indictment against McDonnell, from November 2014 to January 2018, he portrayed himself on social media as an experienced trader in virtual currency, promising investors he would provide trading advice and purchase and trade virtual currency on their behalf. Beginning in approximately May 2016, McDonnell made similar representations and promises to investors through his Staten Island-based company, CabbageTech, Corp., also known as Coin Drop Markets.
But neither McDonnell nor CabbageTech provided investment services. In reaility, McDonnell sent investors false financial statements showing that their investments had been profitable, and stole their money for his personal use.
In total, McDonnell defrauded at least 10 victims of at least $194,000 in US currency, 4.41 Bitcoin, 206 Litecoin, 620 Ethereum Classic and 1,342,634 Verge currency, for a total loss of $224,350. In addition to lying to investors about his company’s prowess, McDonnell also solicited customers using a false alias, “Jason Flack,” an individual who did not actually exist.
“Mr. McDonnell used his knowledge of virtual currencies to scam investors. While he thought he could outsmart law enforcement, his arrest and today’s sentence shows, no matter where you are, what’s done in the dark will be brought to the light,” stated USPIS Inspector-in-Charge Philip R. Bartlett.