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SEC Charges NAC Foundation, CEO And Lobbyist For Fraudulent ICO

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The Securities and Exchange Commission (SEC) has charged Nevada-based NAC Foundation, its Chief Executive Officer Marcus Andrade, and political lobbyist Jack Abramoff with conducting a fraudulent, unregistered offering of AML BitCoin. They allegedly repeatedly misled investors into funding non-existent technology.

AML BitCoin is a digital asset security the defendants claimed was a new and improved version of bitcoin. It was portrayed to be superior to the original bitcoin, with anti-money laundering, anti-terrorism, and theft-resistant technology built into the coin on NAC's own "privately regulated public blockchain."

The SEC's complaints, filed in the Northern District of California, charges NAC, Andrade, and Abramoff with violating the antifraud and securities registration provisions of the federal securities laws, and also charge Abramoff with broker-dealer registration violations.

NAC Foundation is charged of raising at least $5.6 million from more than 2,400 investors by selling tokens that could later be converted to AML BitCoin. The SEC alleges that none of the claims about the coin existed and that the coin and NAC's blockchain were in very early stages of development.

According to the SEC, NAC and Andrade made false claims and misleading statements about the AML Bitcoin to lure investors. They claimed that multiple government agencies were negotiating to use AML BitCoin.

Abramoff and Andrade also falsely claimed that they were on the verge of advertising AML BitCoin during the Super Bowl to boost the offering. Abramoff also allegedly arranged for NAC to pay for purportedly independent articles about AML BitCoin.

The SEC further alleges that Andrade directed a market manipulation strategy to boost the token's trading volume and price and diverted approximately $1.1 million from the offering for his personal use.

The SEC seeks permanent injunctions, disgorgement, and civil penalties. It also seeks injunctions prohibiting NAC and Andrade from participating in future securities offerings, and barring Andrade from serving as a public company officer or director.

Abramoff has agreed to a settlement imposing permanent and conduct-based injunctions, officer-and-director, industry, and penny stock bars and disgorgement of the $50,000 in commissions he received, plus prejudgment interest of $5,501. The settlement is subject to court approval.

Meanwhile, the U.S. Attorney's Office for the Northern District of California announced parallel criminal actions against Andrade and Abramoff, charging Andrade with wire fraud and Abramoff with conspiracy to commit wire fraud and lobbying disclosure violations.

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