Lobbyist Jack Abramoff Charged in Crypto-Currency Case, U.S. Says

(Bloomberg) -- Jack Abramoff, the onetime Washington insider who went to prison in a lobbying scandal, was charged by the U.S. with illegally lobbying for a fraudulent cryptocurrency project.

Abramoff has agreed to plead guilty to conspiracy and violating the Lobbying Disclosure Act and faces as long as five years in prison, according to a court filing and U.S. Attorney David Anderson in San Francisco.

In separate complaints unveiled Thursday, prosecutors and the U.S. Securities and Exchange Commission alleged that Abramoff misled investors while promoting a blockchain-based digital token called AML BitCoin, through the NAC Foundation. The company’s founder, Rowland Marcus Andrade, is fighting criminal charges, Anderson said.

The two men claimed the security was an improvement on the original Bitcoin because it had encoded security features, including to prevent money laundering, according to the SEC’s complaint against Abramoff. They raised at least $5.6 million from about 2,400 investors, mostly in the U.S., from August 2017 through December 2018, the SEC said. The agency separately sued Andrade and NAC.

According to the SEC, the security features Abramoff and Andrade promoted were still early in development and required additional funds to include them in the new token.

“They deceived investors by, among other things, making false and misleading statements in press releases, social-media outlets, and other promotional materials regarding the status of the technology and governmental agencies’ interest in using AML BitCoin in their payment systems,” according to the SEC’s suit.

In June 2017, Abramoff arranged through a person who turned out to an undercover FBI agent to lobby a member of Congress for a legislative measure, but decided not to register as a lobbyist with the Secretary of State and House of Representatives out of concern it would have a negative impact on his client, according to a plea agreement filed in court. Abramoff agreed to cooperate with prosecutors as part of the plea.

That same year, a reality TV series called “Capitol Makeover: Bitcoin Brigade” was in production featuring Abramoff as he leads a group from AML Bitcoin in a “boot camp” that will transform the members “from techies to lobbyists ready to take on Capitol Hill,” according to a report in the Washington Post.

Abbe Lowell, Abramoff’s attorney, didn’t immediately respond to a phone call seeking comment.

In the early 2000s, Abramoff was at the center of a scandal that led to 20 convictions or guilty pleas, including two officials in President George W. Bush’s administration, a member of Congress, congressional aides and nine other lobbyists. Abramoff served 43 months in prison before he was released in 2010.

The criminal case is U.S. v. Abramoff, 20-cr-00260; the civil suit is SEC v. Abramoff, 20-cv-04190; both in U.S. District Court, Northern District of California (San Francisco).

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