Court Fines Two Defendants In $45M Crypto Scam: Financial Crimes Weekly

The Securities and Exchange Commission (SEC) this week won rulings against two defendants in a cryptocurrency scam that allegedly defrauded up to $45 million out of private investors.

The U.S. Court for the Northern District of Illinois entered final judgments against Arline Woodbury of Ridgewood, New Jersey, and Joyce Holverson of River Forest, Illinois, for their part in a supposed technology sale purported to be worth billions of dollars.

The SEC’s complaint alleged that Woodbury and Holverson raised more than $3 million acting as downstream promoters for a CoinDeal scheme, from which investors would generate massive returns from the imminent sale of secret blockchain technology.

Eight other defendants have been charged in connection with the scam, including the alleged orchestrator Neil Chandran.

The SEC has been investigating the scheme, which took place between 2019 and 2022, and finally charged a number of those involved in early January this year.

Daniel Gregus, director of the market regulator’s Chicago office, said at the time, “We allege the defendants falsely claimed access to valuable blockchain technology and that the imminent sale of the technology would generate investment returns of more than 500,000 times for investors.”

He added, “As alleged in our complaint, in reality this was all just an elaborate scheme where the defendants enriched themselves while defrauding tens of thousands of retail investors.”

For their parts in the scam, Woodbury was ordered by the court to pay disgorgement of $199,151, plus pre-judgment interest of $47,991 and civil penalties of $230,464, while Holverson was fined $164,308 disgorgement, $25,778 interest and a $175,000 civil penalty.

Litigation against the eight other defendants, including Chandran, continues.

Also Read: Big Tech Must Protect Democracy: EU Drafts Misinformation Guidelines Ahead Of Elections

Prosecutors To Appeal Samsung’s Lee Fraud Acquittal

South Korean prosecutors said on Thursday they would appeal a court decision that cleared Samsung chairman Jay Y. Lee of charges that included accounting fraud and stock manipulation.

Monday’s ruling by the Seoul Central District Court acquitted Lee and several other former executives of manipulating the share prices of Samsung subsidiaries Cheil Industries and Samsung C&T to effect a merger of the two companies and strengthen his control over Samsung.

Prosecutors were looking for a five-year jail term for Lee. He was previously jailed for five years over bribery and corruption charges in an unrelated 2017 case, but walked free after less than a year after an appeals court suspended his sentence.

Romance Investment Scams For Valentine’s Day

Just in time for Valentine’s day next week, the Commodity Futures Trading Commission issued a warning about the rise in online financial romance frauds.

Using grooming tactics, fraudsters develop seemingly real relationships with their victims through weeks of text message conversations and then persuade them to put money into scam investments.

The CFTC highlighted one such example that will go to trial in the coming weeks — the CFTC charged cryptocurrency exchange Debiex, alleging it used popular romance scam tactics to fraudulently misappropriate $2.3 million in customers funds.

Now Read: Samsung’s Jay Y. Lee’s Court Win Fuels Company’s Ambitions, Sharpens Nvidia Rivalry

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