The U.S. Justice Department said Friday that three residents of Quebec have been charged by a grand jury in Cleveland, Ohio, on fraud charges related to an $8 million cryptocurrency initial coin offering (ICO).
The three individuals — Dominic Lacroix, Yan Ouellet and Sabrina Paradis-Royer — are charged with wire fraud, conspiracy to commit securities fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering, per the statement.
The charges represent the latest legal development tied to the PlexCoin ICO, which raised approximately $8 million during its 2017 sale. Lacroix and Paradis-Royer were charged by the U.S. Securities and Exchange Commission last year. The two, while neither confirming or denying the SEC's allegations, were ordered to pay close to $7 million in combined fines and penalties.
The DOJ alleged in its release that the three individuals took funds ostensibly said to be used for the development of PlexCoin and used it for themselves.
"The indictment states that the first transfer of PlexCoin occurred in August of 2017, and the PlexCoin ICO continued through October of 2017. Court documents show that the defendants and their co-conspirators regularly transferred investor funds from the PlexCoin ICO into fiat currency accounts, and cryptocurrency addresses belonging to themselves for the purpose of daily living expenses and home renovation products. Investors purchased approximately $8,000,000 USD worth of PlexCoin throughout the ICO," the government alleged.
"While technologies and the means to make investments may change, one thing remains constant – securities fraud ruins lives and deprives victims of their hard-earned money and savings," U.S. Attorney Justin Herdman said in a statement. "Digital currencies are a new type of investment, and just like with traditional securities, you should take the time to research and know exactly what you're getting into before making any type of investment."