SEC Charges Boaz Manor and Blockchain Terminal with Fraudulent ICO
The New York Post reported on Friday, January 17, 2020, “A convicted hedge-fund swindler assumed a fake name and donned a disguise to lure investors into a $30 million cryptocurrency fraud in New York that spanned two years.” This man was Boaz Manor, who was arrested in 2010 in Canada for misappropriating $100 million from his hedge fund. He was sentenced to 4 years in prison, but was released early in 2012. He was also banned for life from the securities industry. Then, in 2015, he had the bright idea of pretending to be somebody else to get back into the industry. To do this, the Post reports “Manor darkened his blond hair and grew a beard. After trying on aliases like “Jay Mills” and “Jay Belzberg,” Manor appears to have settled on the name “Shaun MacDonald.”” Theblockcrypto.com first uncovered and reported MacDonald’s scheme in December of 2018, with great reporting and interesting details.
Manor, as MacDonald was able to raise $31 million in his cryptocurrency’s initial coin offering (ICO). He managed to build the facade of a promising company, at the same time trying not to be seen or recognized. Not sure how he could possibly have expected to get away with that. Of course, he denied pretending to not be Boaz Manor and claimed that he told anyone who asked. Manor remains at large, but his associate Eileen Prado, a New Jersey lawyer, was arrested.
In regards to the scheme, according to the SEC, “between August 2017 and September 2018, the defendants marketed and sold digital asset securities in a purported effort to develop technologies for hedge funds and other investors in digital assets. As alleged, Manor, a resident of Toronto, Canada, darkened his hair, grew a beard, and used aliases to hide his identity and conceal the fact that he had served a year in prison after pleading guilty to criminal charges arising from the collapse of a large Canadian hedge fund. According to the complaint, Manor portrayed his New Jersey-based associate Edith Pardo as the owner of the businesses, and presented himself as an employee of hers named “Shaun MacDonald.” Manor allegedly admitted to certain investors that he concealed his identity because its disclosure would result in “the company being destroyed.” The complaint alleges that the defendants claimed to have 20 hedge funds testing technology to record transactions on a distributed ledger or blockchain. In reality, the defendants had only sent a prototype to a dozen funds, and none of the funds used it or paid for it.”
As we have chronicled on our blog, it is with increasing frequency that ICOs that were done in the past few years are now getting in major legal trouble with the SEC and the federal government.
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