CFTC Wins Permanent Ban Against ‘Vicious’ Bitcoin Operator
CFTC Wins Permanent Ban Against ‘Vicious’ Bitcoin Operator
(Bloomberg) -- The Commodities Futures Trading Commission won a court order permanently banning a cryptocurrency promoter that a judge said preyed on investors in “a bold and vicious fraud.”
U.S. District Judge Jack B. Weinstein in Brooklyn, New York, had previously rejected arguments by Patrick McDonnell, operator of the Staten Island, New York-based CabbageTech Corp. that the CFTC didn’t have the authority to regulate his business.
After holding a nonjury trial in July, Weinstein concluded that McDonnell operated a “boiler room” which illegally deprived large numbers of investors in different states and countries using “trickery, false statements and misappropriation of funds.”
He ordered McDonnell to pay $290,429 in restitution and $871,287 in penalties.
McDonnell, who claimed he couldn’t afford to pay for counsel, acted briefly as his own lawyer, even after Weinstein urged him to seek free legal help. He later stopped coming to court during the trial. Weinstein granted a default judgment against CabbageTech, which wasn’t represented by a lawyer.
To contact the reporter on this story: Patricia Hurtado in Federal Court in Manhattan at pathurtado@bloomberg.net
To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Mary Romano, Peter Blumberg
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