On June 25, 2020, The Securities and Exchange Commission (SEC) charged the political lobbyist Jack Abramoff, along with the Nevada-based NAC Foundation and its CEO Roland Marcus Andrade, with defrauding investors by conducting a fraudulent unregistered offering of “AML BitCoin” in 2017.
According to the SEC’s filings, NAC and Andrade portrayed their so-called AML BitCoin as superior to the original Bitcoin, claiming that it possesses unique anti-money laundering (AML), anti-terrorism and hack-resistant tech built into the crypto asset on NAC’s privately regulated public blockchain.
During its press release, the SEC alleged that NAC Foundation raised at least $5.6M from more than 2,400 investors by selling tokens that could later be converted to AML Bitcoin.
The investment company claimed its “patent-pending technology” was better than Bitcoin because it was compliant with anti-money laundering and know-your-customer (KYC) laws and could not be stolen.
But the SEC, which filed two separate complaints, one against the NAC Foundation and Andre and another against Abramoff, emphasized that none of those hyped capabilities existed and AML Bitcoin and its blockchain had hardly been developed at all.
The AML Bitcoin Scam Went Further
According to the SEC, Abramoff and Andrade went further to falsely claim that they were on the brink of advertising AML BitCoin during the Super Bowl to generate interest in their ICO, despite NAC having no capability to afford the cost of the ad.
The defendants also used deceitful statements in press releases and social media posts concerning the progress of their blockchain. They even blatantly professed that government agencies were very interested in using AML BitCoin.
Many of these false and misleading advertising ploys meant to lure in investors fraudulently, were also disseminated via paid publications that Abramoff arranged and helped write.
The US regulator further alleged that Andrade created a market manipulation scheme to boost their token’s trading volume and price and diverted more than $1.1M from the offering for his personal use.
The SEC Charges all Three Defendants
The SEC publicized that it is seeking permanent injunctions, disgorgement, and civil penalties, as well as sanctions barring the NAC Foundation and Andrade from taking part in future securities offerings.
Moreover, The Attorney’s Office in Northern California revealed he was pursuing parallel criminal actions against both Andrade and Abramoff, ranging from conspiracy to commit wire fraud to lobby disclosure violations.
Abramoff had previously been sentenced to prison for a hoard of crimes, including conspiracy, mail fraud, and tax evasion, and served about four years in 2006.