Federal prosecutors are charging disgraced lobbyist Jack Abramoff, previously imprisoned on public corruption charges, with a new fraud involving the digital currency bitcoin.
The Securities and Exchange Commission is charging 62-year-old Mr. Abramoff and Marcus Andrade with conducting a fraudulent and unregistered offering of AML BitCoin. The U.S. Attorney’s Office for the Northern District of California also said it was prosecuting Mr. Abramoff for wire fraud and lobbying disclosure violations.
“We allege that these defendants repeatedly misled investors into funding non-existent technology, falsely claiming that the technology would make digital asset transactions more secure,” said Kristina Littman, SEC enforcement division’s cyber unit chief, in a statement. “Investors are entitled to truthful information so they can make fully informed investment decisions.”
The SEC said Mr. Abramoff and Mr. Andrade falsely created interest in AML BitCoin by spinning a tale that they were on the verge of advertising during the Super Bowl and that Abramoff arranged to pay for articles to report the allegedly misleading information.
As part of the federal government’s probe, the U.S. Attorney’s Office said, an undercover FBI agent posed as a businessperson to retain Mr. Abramoff, who later lobbied without registering as a lobbyist as required by the Lobbying Disclosure Act. Federal prosecutors said Mr. Abramoff’s prosecution was the first-known criminal prosecution for violation of the Lobbying Disclosure Act.