The U.S. Securities and Exchange Commission (SEC) is seeking default judgment in its case against the operators of the Meta 1 Coin scam. The regulator filed the motion in the District Court of Texas, claiming the defendants were a ‘no show’ for the case.
In its November 18 motion, the regulator sought default judgment against Meta 1 Coin Trust, Ironheart Trust and Clear International Trust. It also named four individuals who it alleges operated the companies—Robert Dunlap, Wanda Traversie-Warner, Nicole Bowdler and Alfred Warner Jr.
The SEC alleges that the four, through their three firms, defrauded investors in the U.S. and beyond of over $9 million. In a 2018 token sale, the defendants sold Meta 1 Coin tokens to the investors, promising them that the token’s value would shoot up in a few months.
In addition, they claimed that the tokens were backed by $1 billion worth of fine art. On their marketing materials, they purported that some of the art pieces they held were by master artists including Van Gogh and Picasso. They also claimed the tokens were backed by $2 billion worth of gold.
The defendants allegedly promised investors a 224,900% return in two years, claiming that their token would shoot up from the $22.22 during the ICO to over $50,000.
To lure investors, the scam brought onboard former Washington Senator David Schmidt. The senator would later become the subject of investigations by the SEC, with a Texas court issuing a warrant for his arrest in early 2020.
The SEC’s first action against Meta 1 Coin was in March 2020 when it obtained an asset freeze to halt the scam. As CoinGeek reported, the watchdog is seeking permanent and conduct-based injunctions, civil penalties against the defendants and disgorgement of ill-gotten gains with prejudgment interest.
See also: Tokenized’s James Belding presentation at CoinGeek Live, Smart Contracts & Tokens on Bitcoin SV: Going Mainstream
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