- The misuse of investor funds by META 1 founders and executives has been laid bare by the SEC
- META 1 chiefs continue to make false claims about the backing of META 1 and have been using investor money to pay credit card bills and for cash withdrawals
- The SEC is hoping to file charges in the next three months
The Securities and Exchange Commission (SEC) has laid bare the tactics used by ongoing scam META 1 to misappropriate investor funds, including paying off the credit cards of project founders and associates. In its latest update, the SEC reveals how its investigation of the bank accounts connected with META 1 chiefs have been used to shift around money sent by investors to try and obscure its path, with the founders continuing to find ways to skirt the SEC’s attempts to shut it down.
SEC Battling to Untangle Financial Spider Web
Fullycrypto has been following the META 1 scam since March 2020 when we came across its hilariously unprofessional whitepaper, and were staggered to find that it had collected over $4 million in investor funds. The SEC took umbrage against the claims made in the whitepaper, such as guaranteed coin appreciation of over 200,000%, as well as its claims that the project was backed by over a billion dollars’ worth of gold and fine art, and issued a cease and desist order, pursuant to further charges.
The SEC has struggled to untangle the financial web META 1 has strung since it collected its money, and the latest report, filed on December 21, shows that it is making progress. Firstly, it states that META 1 is now claiming to be backed by $8.8 billion worth of gold, compared to the $6.4 billion in Fort Knox, and that META 1 continues to claim it is free from government oversight…which is different from simply ignoring cease and desist orders, which is what they have in fact done.
Grassie Promotion Came With $1.4 Million Bonus
The SEC states that META 1 is still ploughing on and expanding its platform, which we have covered in recent months, selling everything from online law courses to merchandise. Of more interest to the SEC is the promotion of board member Richard Grassie to take the place of former board member Peter Shamoon, who settled with the SEC earlier this year and has yet to pay a single cent of the settlement figure.
Following Grassie’s promotion, at least $1.4 million in META 1 investor funds was deposited into a bank account in Grassie’s name. The SEC states that this follows a similar pattern established by Robert Dunlap:
…open a bank account for a short period of time, deposit investor funds, spend investor funds on purposes not stated in the White Paper, including withdrawing investor funds using cashier’s checks to pay other related third parties, then close the bank account and open a new one to repeat the process again.
After depositing investor funds in his personal account, Grassie has then been paying other Meta1-related individuals, including defendants Wanda Ironheart and Alfred Warner; related companies; bills including credit card and loan payments; and withdrawing cash as cashier’s checks made payable to himself and other Meta1 employees.
Investor Funds Used to Pay Rent and Credit Card Bills
These investor funds have been spread around other third-party companies and then, in part, transferred back to Grassie’s accounts, transferred to other Meta1-affiliated companies, and used to pay other expenses of the companies, including rent.
Grassie’s credit card statements were also paid with investor funds, with “both personal and potentially business” costs paid by investor funds. Crucially, the SEC states that there is “no evidence of investor money being used for purposes stated in the White Paper.”
The SEC states in its update that it hopes to file charges relating to misappropriation of funds by META 1 founders and associates by March 2022 once they have completed their financial evaluation.
