Tag: lobbyist

‘AML BitCoin’ Lobbyist Abramoff Pleads Guilty to ICO Fraud

AML BitCoin lobbyist Jack Abramoff has pleaded guilty to multiple accounts of fraud associated with the 2018 Initial Coin Offering (ICO) for AML BitCoin. 

Along with CEO of the NAC Foundation Marcus Andrade, he was charged in June by the Securities and Exchange Commission (SEC) for conspiracy to defraud investors, conspiracy to wire fraud and violation of the Lobbying Disclosure Act. 

Abramoff admitted by phone to having conspired to defraud millions of crypto investors through the ICO. His counterpart, Andrade, who founded AML BitCoin, is currently still fighting criminal charges related to the 2018 ICO, as he has not yet pled guilty. 

Abramoff’s Part in ICO Scam 

Abramoff was hired by Andrade to create a marketing campaign for the ICO. The former AML BitCoin lobbyist admitted that he had incorporated misleading and false information concerning the technical capabilities and development of the AML BitCoin in his campaign. 

AML BitCoin Superior to Bitcoin? 

According to the SEC’s previous report, the Nevada-based NAC Foundation raised at least $5.6 million from more than 2,400 investors in an initial coin offering (ICO) that could later be converted to AML BitCoin.  

During the marketing campaign of the cryptocurrency, Andrade, and Abramoff also claimed that the AML BitCoin was superior to the original Bitcoin, falsely stating that their token had a theft-resistant, anti-terrorism and anti-money laundering technology integrated into it that offered superior security. They also assured investors that their prized token ran on NAC’s very own “privately regulated public blockchain.” AML BitCoin was promoted on social platforms and forums. 

Abramoff and Andrade went on to issue tokens to raise funds for the development of the AMC BitCoin, and said that these “funds” would be exchangeable later on for AML BitCoins when the latter launched. They estimated the launch to be in effect within 6 months. 

SEC asserted that none of the promoted features were real and that the progress of the AML BitCoin creation along with its blockchain platform was actually still very immature and early in its development phase. 

An AML BitCoin Felon And More 

While working for AML BitCoin, Abramoff was also found to partake in numerous illicit lobbying practices and was sentenced to prison for his felonies in 2006. 

NAC Foudation Accuses US SEC of Misleading Court in AML BitCoin Case

The NAC Foundation and its founder and CEO, Rowland Marcus Andrade, accused the US Securities and Exchange Commission (SEC) of prosecutorial misconduct in the SEC’s ongoing legal case against an alleged ‘AML BitCoin’ securities offering. 

On October 20, Rowland Marcus Andrade and his company, the NAC Foundation, filed a notice of claim in which they requested a federal judge working at the San Francisco Superior court in California to throw out the SEC lawsuit filed in June this year.

Fraud Case Against the NAC Foundation

In a separate complaint filed in U.S District Court in San Francisco, the SEC charged the Nevada-based NAC Foundation, its CEO Andrade, and co-founder Jack Abramoff (the political lobbyist) with defrauding investors by carrying out a fraudulent unregistered security digital asset “AML BitCoin” which they claimed was an improved and new version of the original Bitcoin due to its security features.

The SEC reported that NAC Foundation managed to raise more than $5.6 million from over 2,400 retail investors by selling digital tokens, which could later be converted to AML BitCoin.  The SEC’s complaints alleged that NAC Foundation, its CEO Andrade, and co-founder Jack Abramoff described “AML BitCoin” as better than the original Bitcoin because it allegedly had theft-resistant, anti-terrorism, and anti-money laundering technology built into the coin. As per the SEC’s lawsuit, such security capabilities mentioned never existed, and the development of the token and its blockchain was in very early stages.

However, Andrade has accused the SEC of intentionally attempting to mislead the court by alleging that his company offered technology that never worked. He argued that the commission has anti-money laundering patents associated with the NAC Foundation cryptocurrency “AML BitCoin.”

Furthermore, Andrade argued that the terms and conditions of sales of AML BitCoin apparently indicate that the digital asset is not an investment contract. He said that anyone who has bought AML BitCoin entered in a written contract to understand that token is not an investment.

Moreover, Andrade claimed that all customers understand that the digital asset acts as a medium of exchange and could not be used as a right claiming for ownership in a joint venture, firm, or business.

The defendants also argued that the written conditions of sale clarified that their clients should not have an expectation of a return on investment and further stated that the digital assets were not a financial instrument sold or offered as equity or debt.

Lastly, the defendants claimed that the SEC’s alleged inability to point out important components of Howie’s test with regards to the cryptocurrency indicates that the token is not a security. Therefore, Andrade argued that the situation implied that the commission “has no cases.”

The Scale of Punishment

The U.S Attorney’s Office for The Northern District of California announced separate legal charges against Abramoff and Andrade, charging Abramoff with lobbying disclosure violations and conspiracy to commit wire fraud and Andrade with wire fraud.

If convicted, Andrade faces a maximum period of 40 years in prison and a fine of $750,000 and restitution for his alleged violations, while Abramoff faces a maximum period of 10 years in jail and a fine of $500,000 for charges leveled against him.

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