The recently formed cyber unit of the United States Security and Exchange Commission filed its first charges Monday after obtaining an emergency asset freeze to stop an alleged Initial Coin Offering (ICO) fraud.

In a complaint filed in federal court in Brooklyn, New York, the SEC claimed Dominic Lacroix and his startup PlexCorps have been scamming investors in the U.S. and around the world with the promise of more than 1,000 percent return on investment in just one month.

According to the complaint, Lacroix and his partner Sabrina Paradis-Royer have raised more than $15 million since August from thousands of people who have backed PlexCorps in exchange for PlexCoin, a “tokenized currency” that Lacroix and his company promised would let investors “take control of [their] money.”

The PlexCorps fundraising effort, which generated interest through online posts, is what is commonly referred to as an ICO, or initial coin offering. During an ICO, companies aim to attract investors to back new digital currencies by releasing their own coins or tokens in exchange for cash or Bitcoin.

While some ICOs have proven successful—the cryptocurrency Ethereum, for example, rose to prominence after a successful ICO round—the process has also become ripe with fraudulent activity as scammers look to make a quick buck off those trying to invest in the next big thing.

PlexCorps fell into the latter category, according to the SEC, as its creator made outlandish claims that would likely never come to fruition. In promotional posts of the company, Lacroix claimed that if all 400 million PlexCoin tokens were sold, investors could see returns of 1,354 percent in just 29 days.

He also claimed the digital currency was backed by a team of experts around the world, though he couldn’t reveal the names of the company’s executives for fear they would be poached by competitors—he even kept his own identity anonymous through the ICO process.

However, the SEC claims there was no “team” working at PlexCorps—there was only Lacroix and a small group of his employees working in Quebec. As for why Lacroix kept his identity hidden, it wasn’t fear of competition but the fact that he known recidivist securities law violator in Canada.

Despite promises to investors that funds raised from the ICO would go to the company as it worked to expand PlexCoin and create new products, the SEC found the money instead went directly into the pockets of Lacroix and his partner. The money was used on home decor projects and other personal expenses.

The SEC found the two had already misappropriated more than $200,000 of funds on what the agency called “extravagant personal expenditures.” Another $810,000 was about to be made available to Lacroix and Paradis-Royer prior to the SEC’s action to place a freeze on the accounts.

"This first Cyber Unit case hits all of the characteristics of a full-fledged cyber scam and is exactly the kind of misconduct the unit will be pursuing," Robert Cohen, Chief of the SEC’s Cyber Unit, said in a statement. "We acted quickly to protect retail investors from this initial coin offering's false promises."

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