SEC Cease and Desist Alleges Scam Claiming to Return 224,923% on Investment

The United States Securities and Exchange Commission (SEC) is filing against a former senator of the Washington state over an alleged cryptocurrency scam, a report from CoinDesk notes.

So far, the group has “obtained an asset freeze and other emergency relief to halt an ongoing securities fraud” regarding one David Schmidt. He allegedly worked with Nicole Bowdler and Robert Dunlap to sell a cryptocurrency called the Meta 1 Coin. This was done via an unregistered securities offering.

Apparently, the group had said their asset was risk-free, couldn’t drop in value, and would return over 224,000 percent on an investment.

However, these assets were never handed out, and allegedly the three used profits to fund their own personal ventures rather than for the project:

“The complaint alleges that some of the investor funds were used to buy luxury automobiles, including a $215,000 Ferrari.  In all, the complaint alleges the defendants raised more than $4.3 million from more than 150 investors in and outside the U.S.”

Speaking on the matter is one David Peavler, the Regional Director at the Fort Worth Regional Office of the SEC:

“As we allege, the defendants made audacious claims about the Meta 1 Coin and would say almost anything to separate investors from their money. Investors should always look skeptically at promoters who claim that their investment cannot lose value or that investors will receive massive returns.”