CoinDeal Scammers Charged in $45 Million Fraud Case

Summary #

CoinDeal is a defunt cryptocurrency exchange. In January 2023, the U.S. Securities and Exchange Commission (SEC) charged six individuals and two companies for their involvement in a fraudulent investment scheme called CoinDeal, which raised over $45 million from sales of unregistered securities to tens of thousands of investors worldwide. The defendants falsely claimed that investors could generate significant returns by investing in a blockchain technology called CoinDeal, which would be sold for trillions of dollars to a group of wealthy buyers. No sale of CoinDeal ever occurred, and no distributions were made to investors. The defendants allegedly misappropriated millions of dollars of investor funds for personal use.

Attackers #

The SEC charged Neil Chandran, Garry Davidson, Michael Glaspie, Amy Mossel, Linda Knott, and Bryan Lee for their involvement in CoinDeal.

• Neil Chandran: The alleged mastermind behind the CoinDeal scheme, controlling companies under the “ViRSE” banner and fabricating information about CoinDeal’s impending sale. He misappropriated investor funds for personal luxury purchases.
• Garry Davidson: Disseminated false information to investors about CoinDeal, managing day-to-day operations to maintain the facade of legitimacy.
• Michael Glaspie: Fraudulently marketed CoinDeal to investors, making elaborate claims about an impending acquisition. He leveraged his digital marketing skills to attract thousands of investors worldwide and has pleaded guilty to wire fraud charges.
• Amy Mossel: Involved in disseminating false information to investors and acted as a bridge between the scheme’s operators and investors, providing updates and reassurance to keep suspicions at bay.
• Linda Knott: Participated in spreading misleading information about CoinDeal and allegedly managed the financial aspects of the scheme, including misappropriation of investor funds.
• Bryan Lee: Charged in relation to defrauding over 10,000 victims, purportedly responsible for developing and maintaining the digital infrastructure supporting CoinDeal to create a semblance of legitimacy.
• AEO Publishing Inc., Banner Co-Op, Inc., & BannersGo, LLC: Companies charged in the scheme, likely used to promote or facilitate fraudulent activities surrounding CoinDeal.

Losses #

CoinDeal defrauded investors of over $45 million.

Timeline #

• January 4, 2023: The SEC charged six individuals and two companies for their involvement in CoinDeal.
• February 23, 2023: Michael Glaspie pled guilty to orchestrating an investment fraud.
• May 19, 2023: The U.S. Department of Justice charged Bryan Lee by indictment with conspiracy, mail fraud, wire fraud, and engaging in monetary transactions in criminally derived property.

Early Indicators #

• False Claims: The defendants falsely claimed access to valuable blockchain technology and that the imminent sale of the technology would generate investment returns of more than 500,000 times for investors.
• Unregistered Securities: CoinDeal raised over $45 million from sales of unregistered securities to tens of thousands of investors worldwide.
• Misappropriation of Funds: The defendants allegedly misappropriated millions of dollars of investor funds for personal use, including purchasing cars, real estate, and a boat.