The Securities and Exchange Commission (SEC) is seeking to reopen the case against Renwick Haddow, who has been banned from selling securities but has so far faced no monetary penalties.
Haddow, the fraudster behind Bitcoin Store Inc and Bar Works, has had his case closed by the New York Southern District Court – but the US regulator doesn’t believe justice has been served.
As first reported by FinanceFeeds, the regulator claims that Haddow should be forced to repay some of the funds he scammed from unwitting investors.
Haddow defrauded investors through his New York company Bar Works, where investors could buy office space for $25,000 and rent it back to the company, and also through Bitcoin Store Inc, which sold Bitcoins from a physical ATM.
A UK citizen now living in New York, Haddow was extradited from Morocco to the US in April 2018, where it’s believed he was hiding from previous run-ins with British regulators.
It is claimed that Haddow sent more than $4 million from Bar Works bank accounts to private accounts in Mauritius and a further $1 million to accounts he owned in Morocco.
Overall, Bar Works raised $37 million from investors who believed that the company was a legitimate remote working business similar to WeWork.
In total, through numerous shell companies, Haddow is thought to have defrauded $180 million.
Haddow cooperated with law enforcement during the trial, entering a guilty plea and agreeing to help bring his co-conspirator, Savraj Gata-Aura, to justice. Gata-Aura has since been charged with wire fraud.
The guilty plea was unsealed on May 23 2019, with Haddow admitting to hiding his identity through the alias ‘Jonathan Black’ and detailing his involvement in both Bar Works and Bitcoin Store Inc.
As a result, the case was closed following a consent judgement proposed by the SEC in September, with the condition that the case may be reopened at a later date.
The consent judgement prevents Haddow from having any role in selling financial instruments again or engaging in practices which may defraud investors.
However, the SEC argues that justice against Haddow has been limited and is now seeking monetary relief.
SEC representatives have allegedly sent letters to Judge Lorna Schofield requesting that Haddow agrees to reach a restitution agreement with his aggrieved investors.
Haddow, having pleaded guilty to two counts of wire fraud and two counts of wire fraud conspiracy, faces a maximum sentence of 80 years in federal custody.
You can read more about recent SEC rulings on cryptocurrency issues here.