The Securities and Exchange Commission (SEC) has announced fraud charges against John and JonAtina (Tina) Barksdale – a brother and sister team that allegedly pursued two fraudulent digital token offerings that garnered $124 million from retail investors.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York unsealed criminal charges against John Barksdale who was arrested “abroad” on conspiracy, securities fraud, and wire fraud charges.
According to the SEC’s complaint, the Barksdale duo sold the Ormeus Coin on crypto marketplaces – from June 2017 to April 2018 that included “a multi-level marketing business called Ormeus Global.”
The SEC states that John Barksdale held roadshows around the world while he and his sister, Tina, led the promotion of the token via social media posts, YouTube videos, press releases, and more.
The SEC alleges that the Barksdales “falsely stated that Ormeus Coin had a $250 million crypto mining operation and was producing $5.4 million to $8 million per month in mining revenues.”
Apparently, there was a website that displayed a wallet with more than $190 million in assets, as of November 2021, when the wallets were worth less than $500,000..
“We allege that the Barksdales acted as modern-day snake-oil salesmen, using social media, promotional websites, and in-person roadshows to mislead retail investors for their own personal benefit,” said Melissa Hodgman, Associate Director in the SEC’s Division of Enforcement. “We will continue to vigorously pursue persons who sell securities in schemes to defraud the investing public no matter what label the promoters apply to their products.”
U.S. Attorney Damian Williams commented on the criminal charges:
“As alleged, John Barksdale perpetrated a scheme to sell the cryptocurrency Ormeus Coin to investors around the world through a web of lies, which he spread through in-person roadshows, social media, and even a jumbotron in Times Square. Among other allegedly false statements he made, Barksdale lied that Ormeus Coin was secured by a $250 million cryptocurrency mining operation that had revenues exceeding $5 million per month, when in fact Ormeus’s mining operations never approached such a value or had such revenues. Together with our law enforcement partners here and abroad, we will work tirelessly to prosecute those who commit frauds against the public in connection with the sale of cryptocurrencies.”
The complaint, filed in the U.S. District Court for the Southern District of New York, charges the Barksdales with violating the federal securities laws and seeks injunctive relief, disgorgement plus interest, and civil penalties.