Daily fraud update: 22nd April

Ex-state senator in US hit with arrest warrant

A man who formerly served as a state senator in the US state of Washington has had an arrest warrant placed on him by a judge.

Back in 2018, David Schmidt joined a project called Meta 1 Coin as a member of the board.

However, the Securities and Exchange Commission (SEC) revealed earlier this year that it was placing an asset freeze against the firm in an attempt to stop its operations.

It said it believed that the institution was in fact a form of securities fraud related to cryptocurrencies.

Now, Schmidt and another man, Robert Dunlap, have been issued with bench warrants by a federal judge in the US state of Texas.

This is understood to be due to them failing to attend a previously scheduled hearing.

US District Judge Robert Pitman issued the warrants after Dunlap and Schmidt failed to present themselves to the court over video conference and telephone connections, which were in place because of the coronavirus pandemic.

His reasoning for the issuing of the arrest warrant was that “if incarcerated, Dunlap and Schmidt will be unable to continue Meta 1’s operations, create marketing videos, or email their putative investors”.

He was also quoted as explaining why he was not choosing to opt for a fine.

“They have obtained millions of dollars in revenue from putative investors, so they are likely able to pay a reasonable fine”, the judge said.

“But they cannot, in the wake of the court’s asset freeze order. As a result, a fine would, curiously, neither be especially burdensome nor particularly effective.”

At the time of the SEC’s decision to release the emergency order last month, the regulator went into more detail about the nature of the alleged scam.

It explained that traders were told that they could make returns on their investments of up to six figures in percentage terms.

It also touched on how the defendants claimed that the coin’s value was supported by expensive art.

“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”, it said.

“The defendants also allegedly told investors that the Meta 1 Coin was risk-free, would never lose value and could return up to 224,923%”, it added.

David Peavler, who serves as the Regional Director of the SEC’s Fort Worth Regional Office, accused those allegedly involved – including Schmidt – to have made “audacious” claims.

“As we allege, the defendants made audacious claims about the Meta 1 Coin and would say almost anything to separate investors from their money”, he said.

“Investors should always look skeptically at promoters who claim that their investment cannot lose value or that investors will receive massive returns”, he added.

Chris Lee

Share

Tweet

Safest Forex Brokers 2024

	Broker	Info	Best In	Customer Satisfaction Score
#1	Your capital is at risk Founded: 2014	Global Forex Broker	BEST SPREADS Visit broker	4.8
#2	Your capital is at risk Founded: 2006	Globally regulated broker	BEST CUSTOMER SUPPORT Visit broker	4.9
#3	* 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money Founded: 2008	Global CFD Provider	Best Trading App Visit broker	5
#4	Between 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010	Global Forex Broker	Low minimum deposit Visit broker	4.9
#5	51% of retail CFD accounts lose money Founded: 2007	Global CFD & FX Broker (*Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more)	ALL-INCLUSIVE TRADING PLATFORM Visit broker	4.9
#6	Your capital is at risk Founded: 2009, 2015 and 2017	Global Forex Broker	Low minimum deposit Visit broker	5
#7	Your capital is at risk Founded: 2006	CFD and Cryptocurrency Broker	CFD and Cryptocurrency Visit broker	5

Forex Fraud Certified Brokers

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.