Crypto fraud has always been a big part of the industry. Many fans hate to admit that, and today marks a new case as Jack Abramoff – a Washington insider who ultimately served time in prison for his role in a lobbying scandal – has been charged with lobbying for a phony digital currency project.
Abramoff Could Face Prison Time
Abramoff has agreed to plead guilty to both violating the Lobbying Disclosure Act and to conspiracy. He could spend as many as five years in jail once the conviction is complete. The SEC alleges that Abramoff helped to promote a fraudulent cryptocurrency project known as AML BitCoin through what’s known as the NAC Foundation. That company’s head executive – Rowland Marcus Andrade – is also facing charges.
The project was touted as being an improvement over the world’s number one cryptocurrency, bitcoin. Allegedly, the currency featured encoded security which allowed it to automatically prevent money laundering schemes and other criminal measures. The project managed to garner more than $5 million in funds from more than 2,000 separate investors between the summer months of 2017 and 2018.
The Securities and Exchange Commission sued Abramoff and the BitCoin staff through a separate lawsuit. The criminal charges did not come until after the suit had been settled. The SEC claimed that the security features the coin was touting were not fully developed and still required additional time to be fully implemented into the currency. Thus, Abramoff and the members of NAC were promoting a coin that was not fully functional and did not feature all the traits that were being promoted. Investors had bought an incomplete coin.
Court documents regarding the SEC’s suit explained:
They deceived investors by, among other things, making false and misleading statements in press releases, social media outlets and other promotional materials regarding the status of the technology and governmental agencies’ interest in using AML BitCoin in their payment systems.
Abramoff is facing charges primarily due to his actions of lobbying a member of Congress in the House of Representatives without registering as a lobbyist. The meeting set up between Abramoff and the congressman in question was done through someone who ultimately turned out be an undercover FBI agent, which sealed Abramoff’s fate. He has agreed to work with prosecutors as part of his current plea deal.
It Won’t Be the First Time He’s Been Behind Bars
Abramoff was also going to be part of a reality television show that sought to promote the currency even more by getting people involved in a digital currency boot camp that would transform technical know-it-alls into lobbyists that could push for congressional action on crypto projects. The show has yet to come about.
Abramoff was part of a criminal investigation in the early 2000s that saw him serve nearly four years in prison before being released in the year 2010.