23-Year Prison Term for Texan Behind $20M Meta-1 Coin Cryptocurrency Scam
Between 2018 and 2023, Meta-1 Coin promoters claimed the digital asset was supported by $44 billion worth of gold reserves and $1 billion in fine art collections, both of which proved to be nonexistent.
A resident of Texas who was convicted for his role in running a digital currency fraud scheme that swindled nearly 1,000 investors out of $20 million received a 23-year prison sentence from a United States federal judge this Tuesday.
Robert Dunlap, who held a trustee position in the operation responsible for promoting the fraudulent cryptocurrency Meta-1 Coin, was handed the prison term by US District Judge LaShonda Hunt, who also mandated him to compensate the fraud victims through restitution payments, as announced by the US Attorney's office in Illinois.
In the sentencing memorandum submitted by the government, Assistant US attorneys Paige Nutini and Jared Hasten characterized Dunlap as showing no remorse and noted that his deceptive statements became increasingly elaborate "over the years."
Would-be criminals planning to engage in similar conduct need to know that such actions will be met with a serious repercussion that includes loss of one's liberty for an extended period of time.
Enforcement agencies and regulatory bodies are intensifying their crackdown on cryptocurrency fraud perpetrators. During March, an individual accused of infiltrating the now-defunct decentralized finance platform Uranium Finance faced charges including one count of computer fraud along with one count of money laundering.
Token backed by $44 billion in gold, rare artworks
Last November, a federal jury sitting in the Northern District of Illinois found Dunlap guilty on two separate counts of mail fraud, with each count potentially resulting in a maximum sentence of 20 years in federal incarceration.
The charges against him involved working alongside co-conspirators to promote and distribute Meta-1 Coin via a Meta-1 Coin Trust during the period spanning 2018 through 2023, while making deceptive and fraudulent representations to investors, such as claims that the cryptocurrency was supported by an art portfolio valued at $1 billion containing pieces attributed to Vincent van Gogh and Pablo Picasso, along with $44 billion worth of gold holdings.
According to law enforcement authorities, Dunlap along with his co-conspirators employed automated trading bots designed to artificially boost both the market value and trading activity of Meta-1 Coin on the Meta Exchange, a digital platform that Dunlap himself had established.
During March 2020, the US Securities and Exchange Commission (SEC) issued an asset freeze along with additional emergency protective measures to halt the activities of Dunlap, fellow alleged co-conspirator Nicole Bowdler, and David Schmidt, a former Senator from Washington state, preventing them from continuing to promote and distribute Meta-1 Coin.
According to the SEC, the defendants purportedly informed investors that Meta-1 Coin carried no risk and had the potential to generate returns reaching as high as 224,923%. In reality, the tokens were never delivered to investors, and the collected funds were diverted for personal expenditures and the acquisition of high-end luxury vehicles, including a Ferrari, as detailed by the SEC.