46-Year-Old New Yorker Faces 20 Years in Prison for Swindling Crypto Investors

A 46-year-old Staten Island-based crypto trader is now facing 9 different charges as he swindled nearly $200,000 in cryptocurrency and cash by duping investors.

Patrick McDonnell (AKA “Jason Flack) owner of a firm called CabbageTech, has been charged with wire fraud after soliciting investments on Facebook and Twitter, and allegedly using the money for personal use. The defendant was taken into police custody and an arraignment was held later in the day before the Magistrate Judge Sanket J. Bulsara.

The US Attorney’s Office in the Eastern District of New York recently announced a nine-count indictment against a Staten Island resident, named Patrick McDonnell for defrauding at least 10 investors who were trading in the cryptocurrency. As per the Department of Justice press release, McDonnell had used social media platforms to funnel the funds.

United States Attorney Richard Donoghue stated:

“As alleged, the defendant defrauded investors by making false promises and sending them fraudulent balance statements, hiding the fact that he was stealing their money for his personal use.”

According to the Inspector-in-Charge of United States Postal Inspection Service, Philip R. Bartlett, “he used to smoke and mirrors to allegedly dupe investors into paying his company—CabbageTech, for advice and strategies on crypto-currency trading.”

Digging deeper into the matter, McDonnell portrayed himself as an expert crypto trader during the time period from November 2014 to January 2018. Later, he promised investors to offer trading advice, strategies, and to purchase and trade cryptocurrency on their behalf. McDonnell also used his Staten Island-based company, CabbageTech (AKA Coin Drop Markets), for providing these supposed crypto trading-related services.

Neither McDonnell nor CabbageTech actually offered investment services and allegedly stole the money collected from the investors. In order to keep the investors in check, he also sent them fake balance sheets, showing that their investments had been growing. When investors requested to withdraw their investments, he started giving excuses for payment delays and later he stopped answering altogether.

McDonnell duped at least ten investors and stole at least $194,000 in cash. In addition to that he stole 4.41 Bitcoin (worth around $17,500), 620 Ethereum Classic ($2,900), 1,342,634 Verge ($10,000), and 206 Litecoin ($12,300).

“The defendant’s fraud ends now, he will be held responsible for his criminal conduct,” said United States Attorney Donoghue, attorney for the Eastern District of New York. If proven guilty and convicted, McDonnell faces a jail term of maximum 20 years.

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