#DREAM, #LIVE, #LOVE
The “digital currency” META 1 Coin may or may not have the blessing of Abraham Lincoln and links to a gold mine in Nevada—but the SEC claims its coin is a scam “backed by nothing.”
Updated May. 27, 2020 4:20AM ET / Published May. 27, 2020 3:52AM ET
The Instagram presence of META 1 Coin, a “digital currency” backed by a former Washington state senator and a YouTube mystic who claims she can “channel the archangel Metatron,” has a few quirks. For one, the account favors photos of massive, gold coins that looklike something a cartoon bandit would carry around in a sack marked “$$.” For another, it leans hard into hashtags, piling on labels like #dream, #live, #love, or #vsco, the photo editing app that became shorthand for zoomers with small backpacks.
But the main quirk of @meta1coin might be that it continues to update daily—two months after the Securities and Exchange Commission froze the company’s assets, one month after a Texas district court held the board members in contempt, and just weeks after a judge issued warrants for two members’ arrest, over running what the SEC claims is a $9 million scam involving a coin “backed by nothing.”
On its Instagram page, Meta 1 Coin describes itself as a “Coin for Humanity / Making History / Liquidity of Gold.” It is listed as a “Local Business.” The local business emerged in April of 2018, from two Boca Raton residents named Robert Dunlap and Nicole Bowdler. Dunlap, according to court documents, served as the “architect” of the coin and its “Executive Trustee and Global Visionary.” Bowdler, the YouTube mystic who calls herself “an Earth Angel incarnated to help humanity” and now runs an online school for psychics, came on board as the coin’s “Trustee and Art Acquisitions & Forensics Director of Business Development.”
Dave Schmidt, a former Republican representative in the Washington state legislature who was found to have misappropriated over $32,000 in campaign funds, joined META 1’s Board to do publicity. He talks about the endeavor frequently on his blog, “The Cosmic Connections,” and radio show, “The Sedona Connection” (“Sedona…….” the description reads. “It’s All About the ‘Energy.’ This Program reflects that ‘energy of life.’)
None of them was licensed to sell securities or registered with the SEC “in any capacity.”
The basic gist was that META 1 would convert fiat currency, like the U.S. dollar, into a “tokenized” currency, comprising 450 million coins backed by hard assets. Investors who bought one of the coins at $22.22 a pop would supposedly see its value skyrocket to $50,000 within two years. Put another way, that’s a 224,923 percent return on investment (a “very conservative” estimate, Schmidt claimed).
But it was a sure thing. Or at least, Bowdler said as much on Crypto Visions, Evolutionary Journeys, an online talk show run by another YouTube psychic, who claims that “spirit guides” give her reliable crypto investment advice. Per the complaint: “Bowdler told the audience that Metatron and Abraham Lincoln revealed to her what would happen in the world’s financial and economic structure over the next 20 years.”
But on March 16, 2020, the SEC filed a lawsuit against META 1 Coin, alleging the company was “nothing but a vehicle to steal investors’ money.” The commission’s request for a temporary restraining order to freeze META 1’s assets was granted within a day. In an amended complaint filed on May 14, the commission accused Dunlap, Schmidt and Bowdler of raising over $9 million from at least 500 investors, across 40 states and six foreign countries. The complaint claimed they had funneled the money into personal accounts and phony trusts. One manager allegedly used over $510,000 to buy a house and $215,000 to buy a Ferrari.
On March 30, Dunlap filed a six-sentence rebuttal calling the case an accident. “I am presuming this matter was mistakenly made and looking forward to the immediate dismissal and sealing of this accidental filing while reversing all frozen assets,” he wrote, signing the letter with a stamp of a Tiffany lamp, framed by his signature, “\\I AM// Robert Paul Dunlap.”
Schmidt took to his radio show to call the allegations a “flat-out lie” and accuse the commission’s attorneys of perjury. “This is basically a direct attack from the SEC toward us and we have solid, hard, in-court recorded evidence to back up what we are saying,” Schmidt said on air. “They said they have facts. But it was just hearsay. And in a court of law, when you present it to a judge, it’s called perjury. Perjury is what it’s called, you SEC attorneys.”
In the two months since, Dunlap, Schmidt, Bowdler, and three other associates named in the complaint have returned court subpoenas with the word “fraudulent” written on each page. They have all refused to testify, save for Dunlap, who, according to the court record, declined to answer several important questions, “claiming at various times the questions were ridiculous, the answers were none of the SEC’s business, and he has ‘no contract with the SEC.’” Only Bowdler agreed to turn over documents.
Representatives for META 1 Coin did not respond to several requests for comment, except for one Instagram message, directing inquiries to their “investment team.” The investment team did not get back.
The court case was filed in the Western District of Texas, Austin Division, because Dunlap and Bowdler were living in the nearby town of Fredericksburg when they first started META 1. The company operated there for over a year, according to court documents, offering locals a chance to invest in its “cyber coins,” backed by assets “with skyrocketing values over the last century!”
What those assets were, the SEC complaint alleges, changed over time. As early as April of 2019, META 1 claimed the coin was secured by a $1 billion art collection, featuring “Humanity’s greatest expressions of Life, by Master artists such as Picasso and Van Gough [sic].”
The basis for the claim stemmed from a contract Dunlap had signed, while posing as a “wealthy banker,” according to the SEC, to buy 18 pieces of rare art from a local collector. The dealer, identified in the filings as “Art Collector,” never appraised or authenticated the pieces, estimating their worth at about $100 million. Either way, Dunlap never paid any money. The sale did not go through. In January of 2019, when the collector learned that Dunlap had been advertising his ownership of the works, he sued. That June, a judge declared that neither Dunlap nor META 1 had “any interest, right, or title to the artwork,” and awarded the “Art Collector” $25 million in damages.
One manager allegedly used over $510,000 to buy a house and $215,000 to buy a Ferrari.
By November 2019, according to court documents, META 1 Coin was backed by a new hard asset. This time, it was “vaults of gold” worth $2 billion, which the company secured through a gold mine in Nevada. (According to the SEC, META 1 Coin does not own the mine or have any claim to it. Also, the mine does not produce gold). “In reality,” the complaint reads, “the Coin is backed by nothing.”
After Dunlap and Bowdler relocated to Florida, they added more board members. Their “Senior Director of Operations” was a woman named Wanda Ironheart Traversie-Warner, a self-proclaimed shamanic healer who runs a website called “Ironheart Energy Healing,” and who served two prison terms, at least one for check forgery. Her husband came on board as META 1’s “Forensics Lab/Board Member, Meta 1 Coin Contractor.” Neither was licensed to sell securities.
The board promoted their coin on social media, online workshops, email newsletters, and radio broadcasts on Blog Talk Radio, YouTube, and Facebook. In early 2019, when online forums were already calling the project a scam, Dunlap and Schmidt used those platforms to address the claims. In an episode of Schmidt’s radio show, he interviewed Dunlap about it.
“People have been viciously attacking us and calling us scammers. They’ve been telling everybody, ‘Call the SEC. Call the SEC and report them,’” Schmidt said. “Here’s what’s so ironic. Robert... recently had about a one-hour discussion with a man from the SEC... He was so impressed with everything that we’re doing—that’s absolutely upfront and legal—he came in and bought coins. Was that correct?”
Dunlap replied: “Absolutely.”
According to the SEC and Dunlap’s subsequent testimony, however, it was not. Dunlap had never spoken to anyone from the commission until it sued him. That might not have struck META 1 as a problem. In their complaint, the SEC wrote that the company claimed it was “not bound by any laws.” Specifically, the whitepaper identified the business as a:
Private trust operating in a ‘Private Jurisdiction.’ Meaning [sic] Meta 1 Coin is not within a State or Federal jurisdiction and not accepting contracts from any such parties. The various federal agencies and their attempts of defaming and stopping the advent of digital assets have no legal bearing on META 1 allowing META 1 to operate without the interference of such agencies.”
But neither the SEC nor Texas District Court Judge Robert Pitman appears to agree. On April 8, Judge Pitman granted a preliminary injunction against META 1 Coin. Two weeks later, after all three key defendants failed to show up for a video hearing, Judge Pitman ruled to hold the company in civil contempt. He issued warrants for Schmidt and Dunlap’s arrest, and banned META 1 Coin from “posting content to YouTube, Facebook, or any social media.”
The case, despite COVID-19 delays, is ongoing. As is META 1’s social media. Tuesday morning, @meta1coin posted a video on Instagram of a leaf fluttering in the wind. “META 1 Coin is a paramount investment of security,” the caption read, “considering the status of the Federal Reserve, the US Treasury, and the downward trajectory of the US Dollar...#dream#live#love.”