The United States Securities and Exchange Commission (SEC) has updated the Texas Western District Court on its action against crypto scam Meta 1 Coin Trust.
The document, seen by FX News Group , states that the fraudulent scheme keeps operating in the face of the regulatory action against it.
Since the SEC’s last report , the SEC has issued multiple subpoenas to obtain records from banks and financial institutions, which records should all be received in the next couple of weeks (some entities have requested extensions).
The next phase of work to be done is to schedule the financial records to trace the flow of investor funds. This work is rather tedious and time-consuming, the SEC explains.
Meanwhile, the Meta1 website is still active and claims that Meta1’s activities are beyond the jurisdiction of the United States government. Under the “Frequently Asked Questions” on its website, Meta1 answers “What is Meta1 Coin Trust’s Strategy Concerning the Movement with the IRS, SEC, or any US Govermental Interference?” as follows:
The SEC also notes that Meta1 has held at least one call with a large group of investors via Zoom during this time. Upon information and belief, Meta1 continues to accept funds from investors and funnel them to sources unrelated to the purpose of the offering.”META 1 Coin Trust is a private trust granted by a Secured Party, Robert Paul Dunlap. Legal Notices have been served to all State and Federal agencies in the establishment of META 1 Coin’s private trust status. The Legal notices establish the legal composition and the terms of the private META 1 Coin Trust including jurisdiction. The SEC and IRS create and enforce public statutes and public policy while the META 1 Coin Trust is “Private.” This starting position is a profound and empowered standing. Moreover, if you were to compare the META 1 Coin Trust versus a state-issued limited liability corporation, the META 1 trust is owned by the Grantor and not the state like the LLC. Therefore, the legal entity is not owned by the state and has different and improved legal requirements regarding META 1 Coin Trust operations.
Moreover, recently, Meta1 established an interactive website it calls a “trading platform” (available at https://meta-exchange.io), where it accepts legitimate cryptocurrency (such as Bitcoin) as payment for the Meta1 Coin and charges fees for transactions. The platform does not appear to have a withdrawal feature.
Also, while Relief Defendants Pramana Capital, Inc. and Peter K. Shamoun a/k/a Peter K. Shamoon consented to the entry of an Agreed Final Judgment, which the Court entered on February 3, 2021 , neither Pramana nor Shamoon made the first installment on the agreed and ordered payment plan. Thus, pursuant to the terms of the Agreed Final Judgment, all outstanding payments, including postjudgment interest, are due immediately. Collection efforts are ongoing.
Counsel for the SEC will continue to work with counsel for Pramana and Shamoon regarding their default before seeking Court intervention.
The SEC will update the Court on the status within 90 days (September 29, 2021).
Let’s recall that the SEC launched this case on March 16, 2020. The SEC’s complaint alleges that Florida residents Robert Dunlap and Nicole Bowdler marketed and sold a purported digital asset called the “Meta 1 Coin” in an unregistered securities offering, conducted through the Meta 1 Coin Trust.
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. 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%.
According to the complaint, the defendants never distributed the Meta 1 Coins and instead used investor funds to pay personal expenses and to funnel proceeds to two others, Pramana Capital Inc. and Peter K. Shamoun. The complaint alleges the defendants raised more than $4.3 million from more than 150 investors in and outside the U.S.
The SEC’s complaint charges the Meta 1 Coin Trust, Dunlap, Bowdler, and Schmidt with violating antifraud and securities registration provisions of the federal securities laws.