SEC Charges Siblings With Fraud Exceeding $124M

The Securities and Exchange Commission has charged John and JonAtina Barksdale with fraud for misleading investors through through false claims in a cryptocurrency scheme. 

SEC Brings Charges

The SEC has filed charges against a pair of siblings accused of running a multi-million dollar crypto scam.

John and JonAtina Barksdale have been charged by the SEC with “defrauding thousands of retail investors out of more than $124 million through two unregistered fraudulent offerings of securities involving a digital token called ‘Ormeus Coin.’”

The complaint alleges that the siblings sold the Ormeus Coin to investors since June 2017, when a multi-level marketing business called Ormeus Global also was started and continued to operate until April 2018. Ormeus Global offered and sold subscription packages “that included Ormeus Coin and an investment in a crypto trading platform.” 

The Barksdales have also been accused of “falsely” claiming that the Ormeus Coin was backed by a “$250 million crypto mining operation” that earned $5.4 million to $8 million in monthly revenues. However, the siblings’ mining operations ended in 2019 and generated only $3 million total. 

John Barksdale is also accused of hosting roadshows “around the world” to promote the pair’s offerings. Tina Barksdale allegedly promoted the offerings via YouTube, press releases, social media posts, and “other promotional materials.”

The complaint also stated that the defendants attempted to “preserve the [mining operation] fiction” by displaying a “wallet of an unrelated third party showing more than $190 million in assets as of November 2021,” while the actual Ormeus wallets contained less than $500,000. There are also claims of price manipulation and misuse of investor funds for “personal expenses.” 

The Associate Director in the SEC’s Division of Enforcement, Melissa Hodgman, said:

“We allege that the Barksdales acted as modern-day snake-oil salesmen, using social media, promotional websites, and in-person roadshows to mislead retail investors for their own personal benefit.”

Hodgman noted the Commission’s continued and vigorous pursuit of those “who sell securities in schemes to defraud the investing public no matter what label the promoters apply to their products.” 

Additionally, John Barksdale has been criminally charged by the U.S. Attorney’s Office for the Southern District of New York.

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.