Authorities say he swindled funds through fake trading platform. PHOTO: REUTERS
WASHINGTON: US authorities charged a British businessman with a checkered history with securities fraud for bilking investors in what turned out to be a fake trading platform for virtual currency Bitcoin.
The Securities and Exchange Commission said “the clandestine” Renwick Haddow, a UK citizen living in New York, diverted funds invested in the phony Bitcoin site as well as from a flexible workspace firm Bar Works into accounts in Mauritius and Morocco, totalling $5 million.
He touted experienced senior executives as running the operations, who turned out to be phantoms, and misrepresented the details and success of both companies.
“Haddow created two trendy companies and misled investors into believing that highly-qualified executives were leading them to quick profitability,” said Andrew M. Calamari, director of the SEC’s New York Regional Office.
“In reality, Haddow controlled the companies from behind the scenes and they were far from profitable.” Bitcoin Store claimed to be “an easy-to-use and secure way of holding and trading Bitcoin” and had generated several million dollars in gross sales.
The SEC alleges that in fact it never had any operations nor generated the gross sales it touted. In 2015, Bitcoin Store’s bank accounts allegedly received less than $250,000 in incoming transfers, none of which appear to reflect revenue from customers, the SEC said.
Haddow’s investors pumped more than $37 million into Bar Works, which claimed to provide workspaces in old bars and restaurants, but in fact “primarily sold leases coupled with sub-leases that together functioned like investment notes,” the SEC said in a statement.
The SEC said he was “hiding his connection” to the companies throughout “given his checkered past with regulators in the UK,” where he has faced similar charges for investment schemes.
According to a report in Crain’s, 27 investors from China filed suit in the State Supreme Court June 16 seeking repayment of more than $3 million invested in Bar Works, which they called a Ponzi scheme.
Another investment group filed a similar case against Bar Works in Florida in recent weeks.
Published in The Express Tribune, July 2nd, 2017.
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