CabbageTech CEO Patrick McDonnell was indicted in New York after being charged with defrauding investors out of more than $200,000, says Coin Desk. Using the name Jason Flack, McDonnel stole from November 2014 to January 2018. He was able to victimize no less than 10 investors. As per Coin Desk, he stole around 4.41 bitcoin (amounting to $17,500), $194,000 cash, 206 litecoin ($12,304), 620 etherium classic ($2,914) and 1,342,634 verge coins ($9,965) through wire fraud.
As ‘Jason Flack,’ the CEO reportedly claimed to be an expert in crypto trading, asserting that he will be giving trading advice and executing trades on behalf of his clients. However, these claims were proven to be inflated as clients discovered that the had been giving them fraudulent balance statements that show that their investments are ‘profiting.’ In reality, McDonnell was using his clients’ capital for ‘personal use.’
Meanwhile, Finance Magnates says that the scam operated like a Ponzi scheme in which McDonnell used money from new investors to pay off earlier ones to maintain a semblance of profitability.
Reports by Finance Magnates says that the US attorney for Eastern District of New York states that CabbacgeTech was operating as Coin Drop Markets (CDM), which its principal being Jason Flack, the alias used by McDonnell.
According to the Eastern District of New York attorney Richard P. Donoghue, the criminal conduct can get McDonnel sentenced up to 20 years in prison. Meanwhile, the fraudster ‘gave up the fight’ in July 2018 as he claims to lack the resources to continue the countering the charges.
It seems that this was not the first time that the CabbageTech CEO was sued for this type of conduct. Reportedly, he has a previous case filed by the Commodity Futures Trading Commission for running away taking his clients’ assets.
