CabbageTech made the Cabbage Disappear
A nine-count indictment was unsealed on Tuesday in a federal court in Brooklyn charging Patrick McDonnell, also known as Jason Flack, with wire fraud. According to the press release, he has been arrested because he allegedly “defrauded investors by making false promises and sending them fraudulent balance statements, hiding the fact that he was stealing their money for his personal use”.
McDonnell, the founder of Staten Island-based CabbageTech, also known as Coin Drop Markets, is thought to have defrauded at least ten victims out of nearly $200 000, 206 LTC, 4.41 BTC, 620 ETC and 1,342,634 XVG.
He accomplished the alleged fraud through phone calls and emails to potential customers, advertisements, websites on the internet and social media, all designed to create the appearance of sophistication and legitimacy to his business.
He used “smoke and mirrors” to dupe investors into paying his company for “advice and strategies” on crypto trading, said United States Postal Inspection Service, (USPIS) Special Agent-in-Charge, Philip Bartlett.
Between November 2014 and January 2018, McDonnell is thought to have depicted himself as an experienced trader, telling inexperienced investors that he would provide trading advice and buy crypto on their behalf. In May 2016, he did the same through CabbageTech.
However, neither McDonnell nor CabbageTech actually provided investment services. Instead, he sent investors fake balance statements showing that their investments had been profitable. When investors asked for refunds, McDonnell began by making excuses for delays in repayment, and in time, stopped responding altogether.
McDonnell Falsely Claimed To Trade Over $50 Million In Bitcoin
According to the indictment, he claimed “Wall Street trading expertise, virtual currency expertise, an ongoing record of exceptional performance in trading virtual currencies and a large clientele”. In reality, he was no expert, had no record of performance and had no large clientele.
McDonnell also told customers that CabbageTech had “extensive assets under management, an office on Wall Street in New York, New York and a large organizational structure”. He emailed a potential customer saying that he had “over 8,000 active investors and that he traded over $50 million in Bitcoin for his investors”.
United States Attorney Richard Donoghue, said: “The defendant’s fraud ends now, he will be held responsible for his criminal conduct.”
If found guilty, McDonnell faces a maximum sentence of 20 years behind bars. Throwing a tantrum and walking out of jail will be impossible, unlike his behaviour on a Blocktalk interview two years ago.