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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
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`Case No. 2:23-cv-10017
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`Hon.
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`JURY TRIAL DEMANDED
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`UNITED STATES SECURITIES
`AND EXCHANGE COMMISSION,
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`Plaintiff,
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`v.
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`NEIL S. CHANDRAN,
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`GARRY J. DAVIDSON,
`MICHAEL T. GLASPIE,
`LINDA C. KNOTT,
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`AMY S. MOSSEL,
`AEO PUBLISHING INC.,
`BANNER CO-OP, INC., and
`BANNERSGO, LLC,
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`Defendants.
`_____________________________________/
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`COMPLAINT
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`Plaintiff, the United States Securities and Exchange Commission (“SEC”),
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`alleges as follows:
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`SUMMARY OF ACTION
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`1.
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`This case concerns a brazen and far-reaching unregistered offering
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`fraud conducted between at least 2018 and 2022 by Defendants Neil Chandran,
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`Garry Davidson, Michael Glaspie, Linda Knott, Amy Mossel, Banner Co-Op, Inc.
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.2 Filed 01/04/23 Page 2 of 46
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`(“Banner Co-Op”), BannersGo, LLC (“BannersGo”), and AEO Publishing Inc.
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`(“AEO Publishing”).
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`2.
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`Chandran, a recidivist securities law violator and convicted felon,
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`claimed to own a unique blockchain technology that was on the verge of being sold
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`for trillions of dollars to a group of reputable billionaire buyers (“CoinDeal”).
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`Chandran further claimed his business required interim financial support until the
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`sale transaction closed. Together with and through other named Defendants,
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`Chandran targeted mostly unsophisticated investors with false and misleading
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`promises and representations that investments in CoinDeal would soon yield
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`extremely high returns from the imminent sale of his business. Ultimately, there
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`was no sale, and no distribution of proceeds, because CoinDeal was a sham.
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`3.
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`Given his criminal record, Chandran incentivized others such as
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`Davidson (an investor in a prior Chandran scheme) and Glaspie (recruited by
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`Davidson) to help raise funds for CoinDeal by soliciting public investment.
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`4.
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`Glaspie, an online promoter, raised large sums for CoinDeal from tens
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`of thousands of investors in multiple states and countries. As part of his
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`promotional campaign, Glaspie knowingly or recklessly disseminated false
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`information about CoinDeal that he received from Chandran via Davidson,
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`including information concerning the supposed value and timeline of the sale
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`transaction, as well as the purported involvement of prominent business people,
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`financial institutions and governmental departments or agencies. Glaspie regularly
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`communicated such false information to investors through near-daily written
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`updates and weekly teleconferences, in which Davidson occasionally participated.
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`5.
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`Glaspie made additional misrepresentations and engaged in other
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`fraudulent conduct, including by: creating and publicizing astronomical payout
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`scales that ranged from multi-million dollar returns for investments of $1,000 or
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`less, to returns in excess of $50 billion for investments of $100,000; offering
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`referral bonuses to entice investors to recruit others to participate in CoinDeal; and
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`personally guaranteeing to refund investors with 7% interest should CoinDeal not
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`come to fruition.
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`6.
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`Knott, who invested in CoinDeal through Glaspie and engaged in her
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`own promotional activity, similarly fabricated payout scales with conspicuous rates
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`of return and knowingly or recklessly disseminated false information about
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`CoinDeal when soliciting prospective investors.
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`7.
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`Chandran, Davidson, Glaspie (with substantial assistance from his
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`wife, Mossel, and her business entity, AEO Publishing) and Knott raised over $45
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`million through the fraudulent CoinDeal offering. Investor funds typically flowed
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`into financial accounts held by Glaspie’s entities, Banner Co-Op and BannersGo,
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`were then transferred to accounts controlled by Davidson, and ultimately routed to
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`accounts controlled by Chandran. Knott pooled investor funds she raised, which
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.4 Filed 01/04/23 Page 4 of 46
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`totaled at least $749,000, before periodically transferring amounts to Glaspie.
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`Neither Knott, Glaspie nor Davidson transferred all CoinDeal investor funds
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`upstream – rather, each diverted investor funds for personal use along the way.
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`8.
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`Collectively, Chandran, Davidson, Glaspie, and Knott
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`misappropriated tens of millions of dollars of investor funds for personal use and
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`diverted funds to individuals and entities unrelated to CoinDeal, including Mossel
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`and AEO Publishing.
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`9.
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`As a result of their conduct, Chandran, Davidson, Glaspie, Knott,
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`Banner Co-Op, and BannersGo intentionally, knowingly, or recklessly committed
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`securities fraud and offered and sold unregistered securities. Mossel and AEO
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`Publishing aided and abetted Glaspie’s violations.
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`10. Chandran, Davidson, Glaspie, Knott, Banner Co-Op, and BannersGo
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`violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (the “Securities
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`Act”) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)] and Section 10(b) of the Securities
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`Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5
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`thereunder [17 C.F.R. § 240.10b-5].
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`11. Pursuant to Section 15(b) of the Securities Act [15 U.S.C. § 77o(b)]
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`and Section 20(e) of the Exchange Act [15 U.S.C. § 78t(e)], Davidson, Glaspie,
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`Knott, Banner Co-Op, and BannersGo aided and abetted Chandran’s violations of
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`Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.5 Filed 01/04/23 Page 5 of 46
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`12. Pursuant to Section 15(b) of the Securities Act and Section 20(e) of
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`the Exchange Act, AEO Publishing and Mossel aided and abetted Glaspie’s
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`violations of Sections 5(a), 5(c), and 17(a) of the Securities Act and Section 10(b)
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`of the Exchange Act and Rule 10b-5 thereunder.
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`13. The SEC brings this lawsuit to prevent further harm to investors and
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`to seek disgorgement, civil penalties, officer and director bars, permanent
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`injunctions, and conduct-based injunctions stemming from the Defendants’
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`wrongdoing.
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`14. Unless the Defendants are permanently restrained and enjoined, they
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`will continue to engage in the acts, practices, and courses of business set forth in
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`this Complaint and in acts, practices, and courses of business of similar type and
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`object.
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`JURISDICTION AND VENUE
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`15. The Court has jurisdiction over this action pursuant to Sections 20(b)
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`and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b) and 77v(a)], and Sections
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`21(d) and 27(a) of the Exchange Act [15 U.S.C. §§78u(d) and 78aa(a)].
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`16. Venue is proper in this judicial district pursuant to Section 22(a) of the
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`Securities Act [15 U.S.C. § 77v(a)] and Section 27(a) of the Exchange Act [15
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`U.S.C. § 78aa(a)], because many of the acts, transactions and courses of business
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`constituting the violations alleged in this Complaint occurred within the
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`jurisdiction of this district.
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`17.
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`In connection with the conduct alleged in this Complaint, the
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`Defendants, directly and indirectly, have made use of the mails and/or means or
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`instrumentalities of transportation or communication in interstate commerce.
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`DEFENDANTS
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`18. Neil S. Chandran, age 51, is currently imprisoned in Nebraska while
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`awaiting trial. Chandran resided in California and Nevada during the relevant time
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`period. Chandran managed at least four entities under the umbrella name Virse:
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`ViMarket, Inc., ViDelivery, Inc., Studio Vi, Inc., and Free Vi Lab (collectively, the
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`“Chandran Entities”). In 2006, California’s Department of Corporations ordered
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`Chandran to desist and refrain from offering or selling securities in California. In
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`2015, the Alberta Securities Commission sanctioned Chandran and his company
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`for engaging in unregistered trading and illegal securities offerings and fined him
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`$460,000 CAD. In 2016, the Ontario Securities Commission entered a reciprocal
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`order against Chandran, banning him from trading in securities and soliciting
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`investors to trade in securities. In 2018, Chandran pled guilty to grand larceny and
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`securities fraud in the state of New York and was ordered to pay $2,868,000. In
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`June 2022, the Department of Justice (“DOJ”) indicted Chandran for wire fraud
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`and money laundering in connection with the CoinDeal scheme and obtained a
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`court-ordered freeze of his assets. Chandran does not hold any securities licenses
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`and has never registered with the SEC.
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`19. Garry J. Davidson, age 68, resides in Henderson, Nevada. Davidson
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`previously invested in another of Chandran’s purported business ventures and
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`facilitated investments and payments in connection with CoinDeal and the
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`Chandran Entities. In June 2022, the Alabama Securities Commission (“ASC”)
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`ordered Davidson to cease and desist from offering or selling securities in Alabama
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`due to his involvement with CoinDeal. Davidson does not hold any securities
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`licenses and has never registered with the SEC.
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`20. Michael T. Glaspie, age 71, resides in Palm City, Florida. Glaspie
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`controls BannersGo, LLC and Banner Co-Op, Inc. (collectively, the “Glaspie
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`Entities”). In January 2020, Michigan’s Department of Licensing and Regulatory
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`Affairs (“LARA”) ordered Glaspie to cease and desist from offering or selling
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`unregistered securities in Michigan due to his involvement with CoinDeal. In June
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`2020, Glaspie agreed to cease and desist and pay a $15,000 fine; however, in
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`October 2021, the Michigan Department of Attorney General obtained an
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`injunction against Glaspie due to his ongoing violations of the June 2020 cease-
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`and-desist order. More recently, in June 2022, the ASC ordered Glaspie to cease
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`and desist from offering or selling securities in Alabama due to his involvement
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`with CoinDeal. Glaspie does not hold any securities licenses and has never
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`registered with the SEC.
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`21. Linda C. Knott, age 57, resides in Oklahoma City, Oklahoma. Knott
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`acted as a downstream promoter for CoinDeal and raised investor funds through
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`her d/b/a entity, Together We Profit. In April 2022, LARA ordered Knott to cease
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`and desist from offering or selling unregistered securities in Michigan due to her
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`involvement with CoinDeal. In August 2022, Knott agreed to cease and desist and
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`pay a $10,000 fine. Knott does not hold any securities licenses and has never
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`registered with the SEC.
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`22. Amy Mossel, age 55, resides in Palm City, Florida. Mossel is married
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`to Glaspie. Mossel controls AEO Publishing Inc. Mossel assisted Glaspie in
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`disseminating information to the public regarding CoinDeal and collecting investor
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`funds. Mossel does not hold any securities licenses and has never registered with
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`the SEC.
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`23. AEO Publishing is a Delaware corporation formed in March 2000
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`with its principal place of business in Palm City, Florida. Mossel is the sole officer
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`and director of AEO Publishing, an online publishing company. Mossel used AEO
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`Publishing to collect investor funds. AEO Publishing has never registered with the
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`SEC.
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`24. Banner Co-Op is a Delaware corporation formed in August 1998
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`with its principal place of business in Highland, Michigan. Glaspie is the president
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`of Banner Co-Op, an internet services company. In January 2020, LARA ordered
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`Banner Co-Op to cease and desist from offering or selling unregistered securities
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`in Michigan due to its involvement with CoinDeal. In June 2020, Banner Co-Op
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`agreed to cease and desist and pay a $15,000 fine; however, in October 2021, the
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`Michigan Department of Attorney General obtained an injunction against Banner
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`Co-Op due to its ongoing violations of the June 2020 cease and desist order. More
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`recently, in June 2022, the ASC ordered Banner Co-Op to cease and desist from
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`offering or selling securities in Alabama due to its involvement with CoinDeal.
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`Banner Co-Op has never registered with the SEC.
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`25. BannersGo is a Michigan limited liability company formed in
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`December 2019 with its principal place of business in Highland, Michigan.
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`Glaspie organized BannersGo as an internet services company. BannersGo has
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`never registered with the SEC.
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`FACTS
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`Chandran Created the “CoinDeal” Scheme
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`26. From at least 2018, Chandran repeatedly touted an investment
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`opportunity that supposedly revolved around valuable blockchain technology he
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`was far along in the process of selling to a group of wealthy buyers at a trillion-
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`dollar valuation. Chandran sought short-term funding for business operating
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`expenses during the completion of the purported sale process and promised
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`investors substantial returns once the sale closed. This investment opportunity later
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`became widely known to investors as “CoinDeal.”
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`27.
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`In reality, CoinDeal was merely the most recent iteration of
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`Chandran’s prior fraudulent schemes. No such buyer group existed, there was no
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`impending sale, and Chandran was incapable of producing the astronomical returns
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`he promised.
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`28. Given the public record of his legal troubles, Chandran sought to
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`utilize others to solicit investors on his behalf. Chandran turned to Davidson, an
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`investor in one of his prior schemes who remained in contact with Chandran in
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`hopes of recouping his prior investment. Davidson agreed to find others to invest,
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`financially motivated by Chandran’s offer to pay him increased returns based on
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`the amount he could raise.
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`Davidson Recruited Glaspie and Served as a Go-Between for Chandran
`29. Davidson sought avenues for fundraising and identified Glaspie
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`through an internet search. In or around mid-2018, Davidson contacted Glaspie,
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`based on Glaspie’s substantial online presence and reputed success with internet
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`multi-level marketing programs.
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.11 Filed 01/04/23 Page 11 of 46
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`30. Davidson presented the CoinDeal opportunity to Glaspie. Davidson
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`described it as debt financing for a company involved with cryptocurrency and
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`artificial intelligence that was pending sale. Davidson made Glaspie aware of
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`Chandran’s involvement and offered Glaspie substantial returns.
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`31. Davidson and Glaspie had never met or spoken prior to this initial
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`contact by Davidson. Nonetheless, Glaspie decided to invest and solicit others to
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`invest in CoinDeal without conducting any independent research or other due
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`diligence on Chandran, Davidson, or CoinDeal.
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`32. Specifically, Davidson and Glaspie agreed to solicit investments in
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`CoinDeal from Glaspie’s expansive network of internet marketing contacts and to
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`transfer monies raised from investors to Chandran and/or the Chandran Entities.
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`33. From 2018 to 2022, Davidson relayed information that he received
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`from Chandran about CoinDeal to Glaspie to facilitate Glaspie’s solicitation
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`efforts.
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`34. Chandran regularly used encrypted email, text messages, and phone
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`calls to share with Davidson false and misleading information concerning
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`CoinDeal. Chandran typically provided status updates on the supposed deal,
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`including but not limited to: the involvement of foreign central banks and the
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`United States Department of Homeland Security; the latest board meetings of the
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`consortium of wealthy buyers; the role of certain political figures; and the causes
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`of “temporary” delays to the sale closing. These updates were designed to lull
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`investors and induce them to continue investing in CoinDeal.
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`35. To distribute information received from Chandran via encrypted
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`message, Davidson typically would copy and paste the latest supposed update
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`regarding CoinDeal to an unencrypted email message to Glaspie.
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`36. Glaspie would then include the information received from Davidson
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`in written and/or oral communications with investors and potential investors, such
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`as “CoinDeal Updates” that were made available online and via email, and
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`discussed during teleconferences.
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`37. For example, Chandran (cryptovirutal@hushmail.com) sent an
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`encrypted email to Davidson (kgd526@gmail.com) on February 28, 2019, with the
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`subject line: “Elite Sponsors : Statement Registration Requires Sign Off in SF ;
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`Traveling to Obtain for Close of Business PST.”
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.13 Filed 01/04/23 Page 13 of 46
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`38. On the same day, February 28, 2019, Davidson sent Glaspie an
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`unencrypted email regarding an “update” with the information he had copied from
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`Chandran’s email. As shown below, the email included information regarding the
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`same subject of Chandran’s previous email, including travel to San Francisco for
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`“statement registration”:
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`39. The very next day, in a March 1, 2019 “CoinDeal Update”
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`communication, Glaspie shared with investors the same information he had
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`received from Davidson the day before concerning “statement registration” in San
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`Francisco:
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`40. The above-described pattern of communication between Chandran
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`and Davidson, followed by communication between Davidson and Glaspie,
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`followed by a CoinDeal investor update from Glapsie to investors, occurred
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`regularly in the course of the CoinDeal offering.
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`Chandran, Davidson, and Glaspie Offered CoinDeal to Investors Through
`Glaspie’s Network
`In or around January 2019, Glaspie began promoting the CoinDeal
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`41.
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`opportunity during weekly teleconferences that included over 100,000 invitees
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`from his network of contacts. Glaspie explained that an unnamed Canadian
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`resident had a very valuable (but anonymous) artificial intelligence and
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`cryptocurrency company that was preparing for an imminent sale to a group of
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`billionaire buyers. Glaspie further explained that the Canadian resident was unable
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`to obtain conventional financing due to prior legal issues. Glaspie did not reveal
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`that this unnamed individual was Chandran, and he also failed to disclose that this
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`individual had a criminal history in the United States.
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`42. Davidson participated in certain of these weekly teleconferences
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`alongside Glaspie. Glaspie explained to investors that Davidson brought the
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`opportunity to Glaspie and described him as a representative of CoinDeal. For
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`example, during teleconferences held on March 7, 2020, and August 5, 2020,
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`Glaspie referred to Davidson as a CoinDeal trustee.
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`43.
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`In or around January 2019, Glaspie also began making online posts
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`and disseminating emails to solicit CoinDeal investments. The online posts and
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`emails included materially false and misleading updates on CoinDeal based on
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`information Glaspie received from Chandran via Davidson and a payout scale that
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`promised investors outsized returns based on a given investment amount.
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`44. To attract prospective investors, Glaspie created his own payout scale
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`using Chandran’s astronomical valuations of CoinDeal. Glaspie utilized a tiered
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`payout scale by offering a higher return for larger investment amounts. As set
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`forth below, Glaspie offered increasingly extravagant returns that grew from 10
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`times the investment amount in his updates from early 2019 to 500,000 times the
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`investment amount in updates from late 2021.
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`To Lure Investors, CoinDeal’s Premise Was Little Ventured, Much Gained
`In promoting CoinDeal, Glaspie anticipated that large numbers of
`45.
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`investors would jump at the opportunity to obtain a life-changing financial reward,
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`particularly if it did not require much outlay of capital. Thus, despite having no
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`legitimate basis for doing so, Glaspie published online dozens of different high
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`rates of return that continued to grow over time to encourage investment in
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`CoinDeal, even when the supposedly imminent transaction had yet to occur.
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`Based on these promised payouts, investors were misled to expect millions and
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`potentially billions in return for a comparatively small, short-term investment.
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`46. For example, on June 12, 2019, Glaspie published online a promise to
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`pay returns of 20-to-1 (2000%) on investments in CoinDeal:
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`47. On August 28, 2020, Glaspie published online CoinDeal payout terms
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`ranging from $750,000 for a mere $250 investment to as high as $1 billion for a
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`$100,000 investment:
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`48. On September 9, 2020 (less than two weeks later), Glaspie published
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`online increased CoinDeal payout terms and offered even higher payouts for higher
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`investment amounts, including over $2 billion for a $100,000 investment:
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`49. The following month, on October 19, 2020, Glaspie again published
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`online increased CoinDeal payout terms, ranging from at least $1.5 million for a
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`mere $250 investment to over $4 billion for a $100,000 investment:
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`50. On June 25, 2021, Glaspie published online CoinDeal payout terms
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`that were far more extravagant, ranging from at least $12.5 million for a $500
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`investment to as high as $56.25 billion, plus a high-end luxury automobile, for a
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`$100,000 investment:
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`51. By promising ever-escalating high rates of return, based on false
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`valuation information from Chandran (via Davidson), Glaspie was able to create
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`and maintain investor interest in CoinDeal, even when the supposed deal failed to
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`close on the short-term time horizons advertised to investors.
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`Chandran, Davidson, and Glaspie Repeatedly Fabricated Excuses for Why
`CoinDeal’s Closing Was Delayed
`52. During the CoinDeal offering, Chandran, Davidson, and Glaspie
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`repeatedly represented that CoinDeal was on the cusp of closing, purposefully
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`misleading current and prospective investors to believe they could receive a large
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`payout in a matter of days or weeks, not months or years.
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`53. For example, on March 21, 2019, Glaspie stated in his online update
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`that he expected CoinDeal to close later that day.
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`54. On May 8, 2019, Glaspie stated in his online update that he expected
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`CoinDeal to close the following day.
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`55. On October 2, 2019, Glaspie stated in his online update that CoinDeal
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`was expected to close that night.
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`56. On April 11, 2020, Glaspie stated in his online update that CoinDeal
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`would be closing within three days.
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`57. On January 11, 2021, Glaspie stated in his online update that
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`CoinDeal would be closing by January 13, 2021.
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`58. Without disclosing his full name, Chandran participated in at least one
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`teleconference hosted by Glaspie on October 24, 2020, and told investors that
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`CoinDeal’s closing was only a week or two away.
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`59. CoinDeal, however, never existed and thus, by design, the deal never
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`closed. Glaspie, based on information from Chandran (via Davidson), provided a
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`continuous string of excuses for why closing did not occur. For example, on
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`February 22, 2019, Glaspie falsely claimed in an online post that CoinDeal’s
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`closing had been delayed due to a vendor company declaring bankruptcy:
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.20 Filed 01/04/23 Page 20 of 46
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`60. On April 16, 2019, Glaspie falsely claimed in an online post that
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`closing of CoinDeal had been delayed because a South Korean bank involved in
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`the deal required in-person signatures in Hawaii:
`
`
`61. On May 7, 2019, Glaspie falsely claimed in an online post that
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`CoinDeal’s closing was delayed because an engineer familiar with the company
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`systems was sick:
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.21 Filed 01/04/23 Page 21 of 46
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`62. On July 24, 2019, Glaspie falsely claimed in an online post that
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`closing was somehow delayed due to an issue involving the number of smart
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`phones being supplied by a vendor:
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`
`63. During the CoinDeal offering, Glaspie provided other, similarly false
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`and misleading explanations, based on information from Chandran (via Davidson),
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.22 Filed 01/04/23 Page 22 of 46
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`for why the closing of CoinDeal was delayed but remained imminent, in order to
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`lull investors and induce them to continue investing in CoinDeal.
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`Chandran, Davidson, and Glaspie Provided Investors With Additional False
`Information Regarding CoinDeal
`64. Throughout the relevant time period, prospective investors were
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`constantly flooded with opportunities to invest in CoinDeal. Glaspie continued
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`hosting weekly teleconferences and disseminating written updates on a near-daily
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`basis (and occasionally multiple times in one day) to promote CoinDeal and solicit
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`funds until 2022.
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`65.
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`In addition to false statements about the expected profitability of the
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`CoinDeal transaction, related false promises of outsized investment returns, and
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`myriad false excuses for why CoinDeal had not yet closed, Glaspie and Davidson
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`directly made various other material misrepresentations to investors and
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`prospective investors.
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`66. For example, based on information from Chandran, Davidson falsely
`
`stated, during a teleconference on March 6, 2021, that Billionaire 1 and Billionaire
`
`2 were each under consideration as the potential CEO for the CoinDeal business
`
`enterprise. Billionaire 1 is the founder and executive chairman of a large online
`
`retailing company. Billionaire 2 is the CEO of an electric car company. During
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`the same teleconference, Davidson falsely stated that CoinDeal had a market
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`capitalization of $50 trillion.
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.23 Filed 01/04/23 Page 23 of 46
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`67. Based on information from Chandran (via Davidson), Glaspie
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`similarly falsely stated in his June 7, 2021 online update that Billionaire 1 was a
`
`member of the billionaire buyers’ group that planned to purchase one or more
`
`Chandran Entities:
`
`
`68. Based on information from Chandran (via Davidson), Glaspie falsely
`
`stated during a February 20, 2021 teleconference that Billionaire 2 was also a
`
`member of the buyers’ group that planned to purchase one or more Chandran
`
`Entities.
`
`69. Glaspie also falsely claimed that he was under a strict non-disclosure
`
`agreement, which prevented him from disclosing the name of the seller, the names
`
`of the buyers, and the name of the company. In reality, this was merely another
`
`ruse to avoid scrutiny, as no such non-disclosure agreement existed.
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.24 Filed 01/04/23 Page 24 of 46
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`70. Glaspie went so far as to falsely deny Chandran’s involvement. When
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`investors asked Glaspie whether Chandran was the seller behind CoinDeal, Glaspie
`
`denied Chandran’s role in the scheme.
`
`71. For example, on or about August 19, 2021, a prospective CoinDeal
`
`investor shared a link containing information about Chandran’s 2018 criminal
`
`charges and asked Glaspie to “confirm that Neil Chandran is NOT the seller of this
`
`transaction.” In response, Glaspie denied that Chandran was involved, admonished
`
`the individual for “spreading rumors,” and further stated: “Please make this the last
`
`email on this topic [as] I just don[’]t have time for this disrupting email.”
`
`72. By way of further example, on or about September 3, 2021, Glaspie
`
`again denied Chandran’s involvement in CoinDeal to a prospective investor. On
`
`this occasion, the concerned individual told Glaspie: “I have been doing some
`
`digging around the internet. Some people say that ‘Neil’ the owner, is actually
`
`convicted fraudster Neil Chandran. Please tell me that’s not true.” The individual
`
`further described finding “red flags” when searching Chandran’s name on the
`
`internet. In response, Glaspie stated: “[W]here these rumors start is a mystery to
`
`me. The owner is NOT the man u think he is.”
`
`73. Glaspie also lured investors through false guarantees to investors that
`
`he would repay all amounts invested in CoinDeal with 7% interest within three
`
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`- 24 -
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.25 Filed 01/04/23 Page 25 of 46
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`years if the CoinDeal sale transaction did not occur. In reality, Glaspie did not
`
`have the financial resources to make any such guarantee.
`
`74. For instance, on November 16, 2020, Glaspie published online in a
`
`written update his guarantee to pay 7% interest on all amounts invested in
`
`CoinDeal.
`
`
`
`75. To entice further investment, Glaspie offered referral bonuses for
`
`investors who raised additional funds.
`
`76. For example, Glaspie published online a 25% referral bonus offer in
`
`his October 19, 2020 update:
`
`77. Similarly, on November 16, 2020, Glaspie published online in a
`
`written update his offer of a 25% referral bonus for bringing new investors to
`
`
`
`CoinDeal:
`
`
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`- 25 -
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.26 Filed 01/04/23 Page 26 of 46
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`CoinDeal Investor Funds Flowed Through the Glaspie Entities to Davidson,
`Chandran, and the Chandran Entities
`
`78. At Glaspie’s direction, investors participated in the CoinDeal offering
`
`through the Glaspie Entities.
`
`79. Glaspie instructed investors to send payments for CoinDeal
`
`investments to bank accounts in the name of his entities, Banner Co-Op and
`
`BannersGo, which he promised to investors he would pass along to Davidson for
`
`CoinDeal.
`
`80. The Glaspie Entities received CoinDeal investor funds at certain bank
`
`institutions, some of which were located in Michigan. Investors’ funds were
`
`commingled and transferred to other accounts controlled by Glaspie and his wife,
`
`Mossel, including accounts in the name of Mossel’s company, AEO Publishing.
`
`81. At Davidson’s instruction, Glaspie and/or Mossel caused the transfer
`
`of investor funds, held in accounts in the name of the Glaspie Entities and AEO
`
`Publishing, to specified bank accounts controlled by Davidson.
`
`82. At Chandran’s direction, Davidson transferred the funds upstream to
`
`Chandran, the Chandran Entities, and Chandran’s associates.
`
`83. Certain funds were also transferred directly from the Glaspie Entities
`
`to Chandran and the Chandran Entities following the closure of certain of
`
`Davidson’s bank accounts.
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`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.27 Filed 01/04/23 Page 27 of 46
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`84. From 2019 to 2022, Glaspie, through the Glaspie Entities, raised over
`
`$45 million, as well additional amounts via crypto assets, from thousands of
`
`CoinDeal investors from multiple states and countries.
`
`Defendants Misappropriated Investor Funds
`
`85. Defendants failed to disclose to investors that funds invested in
`
`CoinDeal would be used for purposes unrelated to CoinDeal.
`
`86. Chandran received at least $37 million in investor funds for CoinDeal.
`
`Chandran and the Chandran Entities misappropriated investors’ funds to purchase,
`
`among other items, a fleet of luxury vehicles, various real estate properties in
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`California and Nevada, and a boat.
`
`87. The Glaspie Entities were controlled by Glaspie, and, unbeknownst to
`
`investors, he determined how investor funds would be used upon receipt, including
`
`for his own personal use. Glaspie, through the Glaspie Entities, misappropriated
`
`approximately $5.9 million or more by transferring investor funds to other
`
`accounts that he and Mossel controlled that were unrelated to CoinDeal and by
`
`dir