Three Canadian citizens involved with an alleged initial coin offering scam from crypto project PlexCorps have been charged with fraud over conning investors out of $8 million.

According to a July 24 statement from the U.S. Attorney’s Office in the Northern District of Ohio, PlexCorps owners Dominic Lacroix and Sabrina Paradis-Royer as well as former employee Yan Ouellet were indicted on five charges, including conspiracy to commit securities fraud and wire fraud, wire fraud, and conspiracy to commit money laundering.

The three were found to be responsible for transferring millions in investor funds obtained through an initial coin offering (ICO) for the firm’s cryptocurrency PlexCoin to their personal accounts. Lawmakers said that they used part of the $8 million raised for “daily living expenses and home renovation products.”

Lying to investors

The indictment states that Lacroix, Paradis-Royer, and Ouellet misrepresented PlexCoin to investors through social media posts and websites. 

According to the U.S. Attorney’s Office, the three made false claims stating that PlexCorps' management consisted of a team of experts headquartered in Singapore and that investors could expect returns up to 1,354% within 29 days. 

PlexCorps raised $8,269,218 from PlexCoin’s ICO using these claims.

Litigation begins

The case in Ohio is only the most recent indictment to be brought against individuals involved in the ICO. 

The U.S. Securities and Exchange Commission (SEC) filed an emergency asset freeze against PlexCorps, as well as Lacroix and Paradis-Royer by name, in December 2017 as part of a case accusing the firm of violating securities law. The SEC referred to Lacroix as a “recidivist Quebec securities law violator” when renewing the freeze in June 2018. 

Cointelegraph reported in August that the SEC had reached a $7 million settlement between PlexCorps, Lacroix, and Paradis-Royer. The two are required to pay $4.5 million — roughly 55% of the funds raised in the ICO — as well as $1 million in civil penalties each and $348,145.25 for prejudgment interest.