The U.S. Securities and Exchange Commission (SEC) has filed a new set of evidence further solidifying its legal charges against alleged fraudulent crypto scheme PlexCoin.
The case stemmed from a legal complaint filed by the U.S. SEC in December 2017, alleging that PlexCorps, the organization behind the PlexCoin ICO, embezzled investor funds. As such, the SEC is seeking sanctions against the individuals behind the purported scheme by temporarily freezing all of the company’s assets as well as providing the SEC with permission to access all documents that may be relevant in the investigation.
According to the SEC, the company made a number of false statements in its website to mislead investors and lend credibility to its platform, including publishing a fraudulent white paper as well as claiming that the company was based in Singapore and led by experts around the world. As findings indicate in the investigation, the company’s founder Dominic Lacroix was apparently previously convicted of securities fraud in Quebec, Canada. In the last quarter of 2017, PlexCorps had purportedly amassed over $15 million by defrauding U.S. and Canadian investors.
In June 2018, the court has issued a court order to freeze Lacroix’s personal assets on account of allegedly using clandestine accounts, including one under the name of his sibling.
As the case progresses, the SEC has now obtained new evidence indicating that Lacroix and business partner Sabrina Paradis-Royer has expended thousands of dollars in social media promotions targeting U.S. citizens, on top of misappropriating funds for personal use. As the company claimed in the Facebook ad, PlexCoin was a legitimate investment program that offers significant gains.
While the defendants have not refuted the claims, both business partners argued that PlexCoin is classified as a currency and not as a security, and is therefore not governed by the U.S. federal securities laws, rendering the securities fraud charges moot, a defense that the New York Eastern district court has rejected.