The Securities and Exchange Commission (SEC) has revealed that it's obtained an asset freeze of and have halted an ongoing securities fraud perpetrated by a former Washington state senator David Schmidt and two Florida residents Robert Dunlap and Nicole Bowdler, for ripping off investors in and outside the U.S. More than USD $4.3 million was allegedly stolen from more than 150 investors in and outside the U.S.
Schmidt was a State Senator in Washington State from 2003-06. No stranger to controversy, in 2011 the Public Disclosure Commission of Washington State claimed that Dave improperly reimbursed himself $32,260 in unspent donations for wages and $9,258 on mortgage payments and association fees for his condo for serving in the Senate. In 2012, Schmidt was fined USD$10,000 for using campaign funds for personal use.
“As we allege, the defendants made audacious claims about the Meta 1 Coin and would say almost anything to separate investors from their money,” said David Peavler, Regional Director of the SEC’s Fort Worth Regional Office. “Investors should always look sceptically at promoters who claim that their investment cannot lose value or that investors will receive massive returns, stated an SEC press release.”
The complaint alleges 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 cough up a 224,923 per cent return.
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.
The SEC’s complaint, filed in the Western District of Texas (Austin Division) on March 16, 2020, and unsealed today, charges the Meta 1 Coin Trust, Dunlap, Bowdler, and Schmidt with violating antifraud and securities registration provisions of the federal securities laws. The SEC 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.
Also published on Medium.