Jack Abramoff charged in cryptocurrency case, U.S. says

Jack Abramoff charged in cryptocurrency case, U.S. says

Jack Abramoff, the onetime Washington insider who went to prison in a lobbying scandal, was charged with a criminal conspiracy related to cryptocurrency and lobbying disclosure, a U.S. prosecutor said.

Abramoff has agreed to plead guilty and faces as long as five years in prison, U.S. Attorney David Anderson said Thursday at a press conference in San Francisco.

The alleged fraud was described in a separate lawsuit filed by the U.S. Securities and Exchange Commission, which claimed Abramoff fraudulently promoted 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.

Three years ago, 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 2017 report in the Washington Post.

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 are in U.S. District Court, Northern District of California (San Francisco).