Tuesday, 19 November 2019

Feds allege S.I. man participated in virtual currency scheme on social media

Federal authorities allege a Staten Island man orchestrated a years-long scheme that duped online victims into paying for cryptocurrency trading services, according to an indictment unsealed Tuesday in Brooklyn.

Patrick McDonnell committed wire fraud between 2014 and 2018, using fraudulent balance statements to hide the fact that he was stealing his clients’ money for his own personal use, according to a media release from the office of U.S. Attorney for the Eastern District of New York Richard P. Donoghue.


“The defendant’s fraud ends now, he will be held responsible for his criminal conduct,” Donoghue said.

Part of the evidence being used against the 46-year-old alleged fraudster, who used the alias “Jason Flack,” includes an over-40-minute YouTube video interview about cryptocurrencies.

Throughout the video, the man, who sources allege is McDonnell, wears a Guy Fawkes mask associated with the hacktivist group known as Anonymous.


Donoghue thanked the U.S. Commodity Futures Trading Commission (CFTC) for its cooperation and assistance in the case.

CFTC won a lawsuit against McDonnell’s Travis-based company, CabbageTech, Corp., in August related to its alleged fraud in connection to virtual currencies like bitcoin.

In that case, a federal judge ruled the defendants duped people out of cash and virtual currency with the promise of virtual investment advice that they never received, according to a media release from CFTC.

The ruling required the company to pay over $1.1 million in civil monetary penalties and restitution, according to the release.

When clients asked for refunds, McDonnell offered excuses for delays in repayment, and eventually stopped answering at all, the release from Donoghue’s office alleges.


If convicted in the criminal proceeding, McDonnell faces up to 20 years in prison. His attorney did not return a request for comment Tuesday.


source: silive.com 
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