throbber
Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.1 Filed 01/04/23 Page 1 of 46
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Case No. 2:23-cv-10017
`
`Hon.
`
`
`
`
`JURY TRIAL DEMANDED
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`UNITED STATES SECURITIES
`AND EXCHANGE COMMISSION,
`
`
`
`
`
`
`
`
`
`
`Plaintiff,
`
`
`
`
`
`
`
`
`
`
`
`
`v.
`
`
`
`
`
`
`
`
`
`
`NEIL S. CHANDRAN,
`
`
`GARRY J. DAVIDSON,
`MICHAEL T. GLASPIE,
`LINDA C. KNOTT,
`
`AMY S. MOSSEL,
`AEO PUBLISHING INC.,
`BANNER CO-OP, INC., and
`BANNERSGO, LLC,
`
`
`
`
`
`
`
`
`
`
`
`
`
`Defendants.
`_____________________________________/
`
`
`
`
`
`
`
`
`
`
`COMPLAINT
`
`
`
`Plaintiff, the United States Securities and Exchange Commission (“SEC”),
`
`alleges as follows:
`
`SUMMARY OF ACTION
`
`1.
`
`This case concerns a brazen and far-reaching unregistered offering
`
`fraud conducted between at least 2018 and 2022 by Defendants Neil Chandran,
`
`Garry Davidson, Michael Glaspie, Linda Knott, Amy Mossel, Banner Co-Op, Inc.
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.2 Filed 01/04/23 Page 2 of 46
`
`(“Banner Co-Op”), BannersGo, LLC (“BannersGo”), and AEO Publishing Inc.
`
`(“AEO Publishing”).
`
`2.
`
`Chandran, a recidivist securities law violator and convicted felon,
`
`claimed to own a unique blockchain technology that was on the verge of being sold
`
`for trillions of dollars to a group of reputable billionaire buyers (“CoinDeal”).
`
`Chandran further claimed his business required interim financial support until the
`
`sale transaction closed. Together with and through other named Defendants,
`
`Chandran targeted mostly unsophisticated investors with false and misleading
`
`promises and representations that investments in CoinDeal would soon yield
`
`extremely high returns from the imminent sale of his business. Ultimately, there
`
`was no sale, and no distribution of proceeds, because CoinDeal was a sham.
`
`3.
`
`Given his criminal record, Chandran incentivized others such as
`
`Davidson (an investor in a prior Chandran scheme) and Glaspie (recruited by
`
`Davidson) to help raise funds for CoinDeal by soliciting public investment.
`
`4.
`
`Glaspie, an online promoter, raised large sums for CoinDeal from tens
`
`of thousands of investors in multiple states and countries. As part of his
`
`promotional campaign, Glaspie knowingly or recklessly disseminated false
`
`information about CoinDeal that he received from Chandran via Davidson,
`
`including information concerning the supposed value and timeline of the sale
`
`transaction, as well as the purported involvement of prominent business people,
`
`
`
`- 2 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.3 Filed 01/04/23 Page 3 of 46
`
`financial institutions and governmental departments or agencies. Glaspie regularly
`
`communicated such false information to investors through near-daily written
`
`updates and weekly teleconferences, in which Davidson occasionally participated.
`
`5.
`
`Glaspie made additional misrepresentations and engaged in other
`
`fraudulent conduct, including by: creating and publicizing astronomical payout
`
`scales that ranged from multi-million dollar returns for investments of $1,000 or
`
`less, to returns in excess of $50 billion for investments of $100,000; offering
`
`referral bonuses to entice investors to recruit others to participate in CoinDeal; and
`
`personally guaranteeing to refund investors with 7% interest should CoinDeal not
`
`come to fruition.
`
`6.
`
`Knott, who invested in CoinDeal through Glaspie and engaged in her
`
`own promotional activity, similarly fabricated payout scales with conspicuous rates
`
`of return and knowingly or recklessly disseminated false information about
`
`CoinDeal when soliciting prospective investors.
`
`7.
`
`Chandran, Davidson, Glaspie (with substantial assistance from his
`
`wife, Mossel, and her business entity, AEO Publishing) and Knott raised over $45
`
`million through the fraudulent CoinDeal offering. Investor funds typically flowed
`
`into financial accounts held by Glaspie’s entities, Banner Co-Op and BannersGo,
`
`were then transferred to accounts controlled by Davidson, and ultimately routed to
`
`accounts controlled by Chandran. Knott pooled investor funds she raised, which
`
`
`
`- 3 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.4 Filed 01/04/23 Page 4 of 46
`
`totaled at least $749,000, before periodically transferring amounts to Glaspie.
`
`Neither Knott, Glaspie nor Davidson transferred all CoinDeal investor funds
`
`upstream – rather, each diverted investor funds for personal use along the way.
`
`8.
`
`Collectively, Chandran, Davidson, Glaspie, and Knott
`
`misappropriated tens of millions of dollars of investor funds for personal use and
`
`diverted funds to individuals and entities unrelated to CoinDeal, including Mossel
`
`and AEO Publishing.
`
`9.
`
`As a result of their conduct, Chandran, Davidson, Glaspie, Knott,
`
`Banner Co-Op, and BannersGo intentionally, knowingly, or recklessly committed
`
`securities fraud and offered and sold unregistered securities. Mossel and AEO
`
`Publishing aided and abetted Glaspie’s violations.
`
`10. Chandran, Davidson, Glaspie, Knott, Banner Co-Op, and BannersGo
`
`violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (the “Securities
`
`Act”) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)] and Section 10(b) of the Securities
`
`Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5
`
`thereunder [17 C.F.R. § 240.10b-5].
`
`11. Pursuant to Section 15(b) of the Securities Act [15 U.S.C. § 77o(b)]
`
`and Section 20(e) of the Exchange Act [15 U.S.C. § 78t(e)], Davidson, Glaspie,
`
`Knott, Banner Co-Op, and BannersGo aided and abetted Chandran’s violations of
`
`Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
`
`
`
`- 4 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.5 Filed 01/04/23 Page 5 of 46
`
`12. Pursuant to Section 15(b) of the Securities Act and Section 20(e) of
`
`the Exchange Act, AEO Publishing and Mossel aided and abetted Glaspie’s
`
`violations of Sections 5(a), 5(c), and 17(a) of the Securities Act and Section 10(b)
`
`of the Exchange Act and Rule 10b-5 thereunder.
`
`13. The SEC brings this lawsuit to prevent further harm to investors and
`
`to seek disgorgement, civil penalties, officer and director bars, permanent
`
`injunctions, and conduct-based injunctions stemming from the Defendants’
`
`wrongdoing.
`
`14. Unless the Defendants are permanently restrained and enjoined, they
`
`will continue to engage in the acts, practices, and courses of business set forth in
`
`this Complaint and in acts, practices, and courses of business of similar type and
`
`object.
`
`JURISDICTION AND VENUE
`
`15. The Court has jurisdiction over this action pursuant to Sections 20(b)
`
`and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b) and 77v(a)], and Sections
`
`21(d) and 27(a) of the Exchange Act [15 U.S.C. §§78u(d) and 78aa(a)].
`
`16. Venue is proper in this judicial district pursuant to Section 22(a) of the
`
`Securities Act [15 U.S.C. § 77v(a)] and Section 27(a) of the Exchange Act [15
`
`U.S.C. § 78aa(a)], because many of the acts, transactions and courses of business
`
`
`
`- 5 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.6 Filed 01/04/23 Page 6 of 46
`
`constituting the violations alleged in this Complaint occurred within the
`
`jurisdiction of this district.
`
`17.
`
`In connection with the conduct alleged in this Complaint, the
`
`Defendants, directly and indirectly, have made use of the mails and/or means or
`
`instrumentalities of transportation or communication in interstate commerce.
`
`DEFENDANTS
`
`18. Neil S. Chandran, age 51, is currently imprisoned in Nebraska while
`
`awaiting trial. Chandran resided in California and Nevada during the relevant time
`
`period. Chandran managed at least four entities under the umbrella name Virse:
`
`ViMarket, Inc., ViDelivery, Inc., Studio Vi, Inc., and Free Vi Lab (collectively, the
`
`“Chandran Entities”). In 2006, California’s Department of Corporations ordered
`
`Chandran to desist and refrain from offering or selling securities in California. In
`
`2015, the Alberta Securities Commission sanctioned Chandran and his company
`
`for engaging in unregistered trading and illegal securities offerings and fined him
`
`$460,000 CAD. In 2016, the Ontario Securities Commission entered a reciprocal
`
`order against Chandran, banning him from trading in securities and soliciting
`
`investors to trade in securities. In 2018, Chandran pled guilty to grand larceny and
`
`securities fraud in the state of New York and was ordered to pay $2,868,000. In
`
`June 2022, the Department of Justice (“DOJ”) indicted Chandran for wire fraud
`
`and money laundering in connection with the CoinDeal scheme and obtained a
`
`
`
`- 6 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.7 Filed 01/04/23 Page 7 of 46
`
`court-ordered freeze of his assets. Chandran does not hold any securities licenses
`
`and has never registered with the SEC.
`
`19. Garry J. Davidson, age 68, resides in Henderson, Nevada. Davidson
`
`previously invested in another of Chandran’s purported business ventures and
`
`facilitated investments and payments in connection with CoinDeal and the
`
`Chandran Entities. In June 2022, the Alabama Securities Commission (“ASC”)
`
`ordered Davidson to cease and desist from offering or selling securities in Alabama
`
`due to his involvement with CoinDeal. Davidson does not hold any securities
`
`licenses and has never registered with the SEC.
`
`20. Michael T. Glaspie, age 71, resides in Palm City, Florida. Glaspie
`
`controls BannersGo, LLC and Banner Co-Op, Inc. (collectively, the “Glaspie
`
`Entities”). In January 2020, Michigan’s Department of Licensing and Regulatory
`
`Affairs (“LARA”) ordered Glaspie to cease and desist from offering or selling
`
`unregistered securities in Michigan due to his involvement with CoinDeal. In June
`
`2020, Glaspie agreed to cease and desist and pay a $15,000 fine; however, in
`
`October 2021, the Michigan Department of Attorney General obtained an
`
`injunction against Glaspie due to his ongoing violations of the June 2020 cease-
`
`and-desist order. More recently, in June 2022, the ASC ordered Glaspie to cease
`
`and desist from offering or selling securities in Alabama due to his involvement
`
`
`
`- 7 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.8 Filed 01/04/23 Page 8 of 46
`
`with CoinDeal. Glaspie does not hold any securities licenses and has never
`
`registered with the SEC.
`
`21. Linda C. Knott, age 57, resides in Oklahoma City, Oklahoma. Knott
`
`acted as a downstream promoter for CoinDeal and raised investor funds through
`
`her d/b/a entity, Together We Profit. In April 2022, LARA ordered Knott to cease
`
`and desist from offering or selling unregistered securities in Michigan due to her
`
`involvement with CoinDeal. In August 2022, Knott agreed to cease and desist and
`
`pay a $10,000 fine. Knott does not hold any securities licenses and has never
`
`registered with the SEC.
`
`22. Amy Mossel, age 55, resides in Palm City, Florida. Mossel is married
`
`to Glaspie. Mossel controls AEO Publishing Inc. Mossel assisted Glaspie in
`
`disseminating information to the public regarding CoinDeal and collecting investor
`
`funds. Mossel does not hold any securities licenses and has never registered with
`
`the SEC.
`
`23. AEO Publishing is a Delaware corporation formed in March 2000
`
`with its principal place of business in Palm City, Florida. Mossel is the sole officer
`
`and director of AEO Publishing, an online publishing company. Mossel used AEO
`
`Publishing to collect investor funds. AEO Publishing has never registered with the
`
`SEC.
`
`
`
`- 8 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.9 Filed 01/04/23 Page 9 of 46
`
`24. Banner Co-Op is a Delaware corporation formed in August 1998
`
`with its principal place of business in Highland, Michigan. Glaspie is the president
`
`of Banner Co-Op, an internet services company. In January 2020, LARA ordered
`
`Banner Co-Op to cease and desist from offering or selling unregistered securities
`
`in Michigan due to its involvement with CoinDeal. In June 2020, Banner Co-Op
`
`agreed to cease and desist and pay a $15,000 fine; however, in October 2021, the
`
`Michigan Department of Attorney General obtained an injunction against Banner
`
`Co-Op due to its ongoing violations of the June 2020 cease and desist order. More
`
`recently, in June 2022, the ASC ordered Banner Co-Op to cease and desist from
`
`offering or selling securities in Alabama due to its involvement with CoinDeal.
`
`Banner Co-Op has never registered with the SEC.
`
`25. BannersGo is a Michigan limited liability company formed in
`
`December 2019 with its principal place of business in Highland, Michigan.
`
`Glaspie organized BannersGo as an internet services company. BannersGo has
`
`never registered with the SEC.
`
`FACTS
`
`Chandran Created the “CoinDeal” Scheme
`
`26. From at least 2018, Chandran repeatedly touted an investment
`
`opportunity that supposedly revolved around valuable blockchain technology he
`
`was far along in the process of selling to a group of wealthy buyers at a trillion-
`
`
`
`- 9 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.10 Filed 01/04/23 Page 10 of 46
`
`dollar valuation. Chandran sought short-term funding for business operating
`
`expenses during the completion of the purported sale process and promised
`
`investors substantial returns once the sale closed. This investment opportunity later
`
`became widely known to investors as “CoinDeal.”
`
`27.
`
`In reality, CoinDeal was merely the most recent iteration of
`
`Chandran’s prior fraudulent schemes. No such buyer group existed, there was no
`
`impending sale, and Chandran was incapable of producing the astronomical returns
`
`he promised.
`
`28. Given the public record of his legal troubles, Chandran sought to
`
`utilize others to solicit investors on his behalf. Chandran turned to Davidson, an
`
`investor in one of his prior schemes who remained in contact with Chandran in
`
`hopes of recouping his prior investment. Davidson agreed to find others to invest,
`
`financially motivated by Chandran’s offer to pay him increased returns based on
`
`the amount he could raise.
`
`Davidson Recruited Glaspie and Served as a Go-Between for Chandran
`29. Davidson sought avenues for fundraising and identified Glaspie
`
`through an internet search. In or around mid-2018, Davidson contacted Glaspie,
`
`based on Glaspie’s substantial online presence and reputed success with internet
`
`multi-level marketing programs.
`
`
`
`- 10 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.11 Filed 01/04/23 Page 11 of 46
`
`30. Davidson presented the CoinDeal opportunity to Glaspie. Davidson
`
`described it as debt financing for a company involved with cryptocurrency and
`
`artificial intelligence that was pending sale. Davidson made Glaspie aware of
`
`Chandran’s involvement and offered Glaspie substantial returns.
`
`31. Davidson and Glaspie had never met or spoken prior to this initial
`
`contact by Davidson. Nonetheless, Glaspie decided to invest and solicit others to
`
`invest in CoinDeal without conducting any independent research or other due
`
`diligence on Chandran, Davidson, or CoinDeal.
`
`32. Specifically, Davidson and Glaspie agreed to solicit investments in
`
`CoinDeal from Glaspie’s expansive network of internet marketing contacts and to
`
`transfer monies raised from investors to Chandran and/or the Chandran Entities.
`
`33. From 2018 to 2022, Davidson relayed information that he received
`
`from Chandran about CoinDeal to Glaspie to facilitate Glaspie’s solicitation
`
`efforts.
`
`34. Chandran regularly used encrypted email, text messages, and phone
`
`calls to share with Davidson false and misleading information concerning
`
`CoinDeal. Chandran typically provided status updates on the supposed deal,
`
`including but not limited to: the involvement of foreign central banks and the
`
`United States Department of Homeland Security; the latest board meetings of the
`
`consortium of wealthy buyers; the role of certain political figures; and the causes
`
`
`
`- 11 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.12 Filed 01/04/23 Page 12 of 46
`
`of “temporary” delays to the sale closing. These updates were designed to lull
`
`investors and induce them to continue investing in CoinDeal.
`
`35. To distribute information received from Chandran via encrypted
`
`message, Davidson typically would copy and paste the latest supposed update
`
`regarding CoinDeal to an unencrypted email message to Glaspie.
`
`36. Glaspie would then include the information received from Davidson
`
`in written and/or oral communications with investors and potential investors, such
`
`as “CoinDeal Updates” that were made available online and via email, and
`
`discussed during teleconferences.
`
`37. For example, Chandran (cryptovirutal@hushmail.com) sent an
`
`encrypted email to Davidson (kgd526@gmail.com) on February 28, 2019, with the
`
`subject line: “Elite Sponsors : Statement Registration Requires Sign Off in SF ;
`
`Traveling to Obtain for Close of Business PST.”
`
`
`
`- 12 -
`
`
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.13 Filed 01/04/23 Page 13 of 46
`
`38. On the same day, February 28, 2019, Davidson sent Glaspie an
`
`unencrypted email regarding an “update” with the information he had copied from
`
`Chandran’s email. As shown below, the email included information regarding the
`
`same subject of Chandran’s previous email, including travel to San Francisco for
`
`“statement registration”:
`
`39. The very next day, in a March 1, 2019 “CoinDeal Update”
`
`communication, Glaspie shared with investors the same information he had
`
`received from Davidson the day before concerning “statement registration” in San
`
`Francisco:
`
`
`
`
`
`- 13 -
`
`
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.14 Filed 01/04/23 Page 14 of 46
`
`40. The above-described pattern of communication between Chandran
`
`and Davidson, followed by communication between Davidson and Glaspie,
`
`followed by a CoinDeal investor update from Glapsie to investors, occurred
`
`regularly in the course of the CoinDeal offering.
`
`Chandran, Davidson, and Glaspie Offered CoinDeal to Investors Through
`Glaspie’s Network
`In or around January 2019, Glaspie began promoting the CoinDeal
`
`41.
`
`opportunity during weekly teleconferences that included over 100,000 invitees
`
`from his network of contacts. Glaspie explained that an unnamed Canadian
`
`resident had a very valuable (but anonymous) artificial intelligence and
`
`cryptocurrency company that was preparing for an imminent sale to a group of
`
`billionaire buyers. Glaspie further explained that the Canadian resident was unable
`
`to obtain conventional financing due to prior legal issues. Glaspie did not reveal
`
`that this unnamed individual was Chandran, and he also failed to disclose that this
`
`individual had a criminal history in the United States.
`
`42. Davidson participated in certain of these weekly teleconferences
`
`alongside Glaspie. Glaspie explained to investors that Davidson brought the
`
`opportunity to Glaspie and described him as a representative of CoinDeal. For
`
`example, during teleconferences held on March 7, 2020, and August 5, 2020,
`
`Glaspie referred to Davidson as a CoinDeal trustee.
`
`
`
`- 14 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.15 Filed 01/04/23 Page 15 of 46
`
`43.
`
`In or around January 2019, Glaspie also began making online posts
`
`and disseminating emails to solicit CoinDeal investments. The online posts and
`
`emails included materially false and misleading updates on CoinDeal based on
`
`information Glaspie received from Chandran via Davidson and a payout scale that
`
`promised investors outsized returns based on a given investment amount.
`
`44. To attract prospective investors, Glaspie created his own payout scale
`
`using Chandran’s astronomical valuations of CoinDeal. Glaspie utilized a tiered
`
`payout scale by offering a higher return for larger investment amounts. As set
`
`forth below, Glaspie offered increasingly extravagant returns that grew from 10
`
`times the investment amount in his updates from early 2019 to 500,000 times the
`
`investment amount in updates from late 2021.
`
`To Lure Investors, CoinDeal’s Premise Was Little Ventured, Much Gained
`In promoting CoinDeal, Glaspie anticipated that large numbers of
`45.
`
`investors would jump at the opportunity to obtain a life-changing financial reward,
`
`particularly if it did not require much outlay of capital. Thus, despite having no
`
`legitimate basis for doing so, Glaspie published online dozens of different high
`
`rates of return that continued to grow over time to encourage investment in
`
`CoinDeal, even when the supposedly imminent transaction had yet to occur.
`
`Based on these promised payouts, investors were misled to expect millions and
`
`potentially billions in return for a comparatively small, short-term investment.
`
`
`
`- 15 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.16 Filed 01/04/23 Page 16 of 46
`
`46. For example, on June 12, 2019, Glaspie published online a promise to
`
`pay returns of 20-to-1 (2000%) on investments in CoinDeal:
`
`
`47. On August 28, 2020, Glaspie published online CoinDeal payout terms
`
`ranging from $750,000 for a mere $250 investment to as high as $1 billion for a
`
`$100,000 investment:
`
`
`48. On September 9, 2020 (less than two weeks later), Glaspie published
`
`online increased CoinDeal payout terms and offered even higher payouts for higher
`
`investment amounts, including over $2 billion for a $100,000 investment:
`
`
`
`- 16 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.17 Filed 01/04/23 Page 17 of 46
`
`
`49. The following month, on October 19, 2020, Glaspie again published
`
`online increased CoinDeal payout terms, ranging from at least $1.5 million for a
`
`mere $250 investment to over $4 billion for a $100,000 investment:
`
`
`50. On June 25, 2021, Glaspie published online CoinDeal payout terms
`
`that were far more extravagant, ranging from at least $12.5 million for a $500
`
`investment to as high as $56.25 billion, plus a high-end luxury automobile, for a
`
`$100,000 investment:
`
`
`
`- 17 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.18 Filed 01/04/23 Page 18 of 46
`
`
`
`51. By promising ever-escalating high rates of return, based on false
`
`valuation information from Chandran (via Davidson), Glaspie was able to create
`
`and maintain investor interest in CoinDeal, even when the supposed deal failed to
`
`close on the short-term time horizons advertised to investors.
`
`Chandran, Davidson, and Glaspie Repeatedly Fabricated Excuses for Why
`CoinDeal’s Closing Was Delayed
`52. During the CoinDeal offering, Chandran, Davidson, and Glaspie
`
`repeatedly represented that CoinDeal was on the cusp of closing, purposefully
`
`misleading current and prospective investors to believe they could receive a large
`
`payout in a matter of days or weeks, not months or years.
`
`
`
`- 18 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.19 Filed 01/04/23 Page 19 of 46
`
`53. For example, on March 21, 2019, Glaspie stated in his online update
`
`that he expected CoinDeal to close later that day.
`
`54. On May 8, 2019, Glaspie stated in his online update that he expected
`
`CoinDeal to close the following day.
`
`55. On October 2, 2019, Glaspie stated in his online update that CoinDeal
`
`was expected to close that night.
`
`56. On April 11, 2020, Glaspie stated in his online update that CoinDeal
`
`would be closing within three days.
`
`57. On January 11, 2021, Glaspie stated in his online update that
`
`CoinDeal would be closing by January 13, 2021.
`
`58. Without disclosing his full name, Chandran participated in at least one
`
`teleconference hosted by Glaspie on October 24, 2020, and told investors that
`
`CoinDeal’s closing was only a week or two away.
`
`59. CoinDeal, however, never existed and thus, by design, the deal never
`
`closed. Glaspie, based on information from Chandran (via Davidson), provided a
`
`continuous string of excuses for why closing did not occur. For example, on
`
`February 22, 2019, Glaspie falsely claimed in an online post that CoinDeal’s
`
`closing had been delayed due to a vendor company declaring bankruptcy:
`
`
`
`- 19 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.20 Filed 01/04/23 Page 20 of 46
`
`
`60. On April 16, 2019, Glaspie falsely claimed in an online post that
`
`closing of CoinDeal had been delayed because a South Korean bank involved in
`
`the deal required in-person signatures in Hawaii:
`
`
`61. On May 7, 2019, Glaspie falsely claimed in an online post that
`
`CoinDeal’s closing was delayed because an engineer familiar with the company
`
`systems was sick:
`
`
`
`- 20 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.21 Filed 01/04/23 Page 21 of 46
`
`
`62. On July 24, 2019, Glaspie falsely claimed in an online post that
`
`closing was somehow delayed due to an issue involving the number of smart
`
`phones being supplied by a vendor:
`
`
`63. During the CoinDeal offering, Glaspie provided other, similarly false
`
`and misleading explanations, based on information from Chandran (via Davidson),
`
`
`
`- 21 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.22 Filed 01/04/23 Page 22 of 46
`
`for why the closing of CoinDeal was delayed but remained imminent, in order to
`
`lull investors and induce them to continue investing in CoinDeal.
`
`Chandran, Davidson, and Glaspie Provided Investors With Additional False
`Information Regarding CoinDeal
`64. Throughout the relevant time period, prospective investors were
`
`constantly flooded with opportunities to invest in CoinDeal. Glaspie continued
`
`hosting weekly teleconferences and disseminating written updates on a near-daily
`
`basis (and occasionally multiple times in one day) to promote CoinDeal and solicit
`
`funds until 2022.
`
`65.
`
`In addition to false statements about the expected profitability of the
`
`CoinDeal transaction, related false promises of outsized investment returns, and
`
`myriad false excuses for why CoinDeal had not yet closed, Glaspie and Davidson
`
`directly made various other material misrepresentations to investors and
`
`prospective investors.
`
`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
`
`the same teleconference, Davidson falsely stated that CoinDeal had a market
`
`capitalization of $50 trillion.
`
`
`
`- 22 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.23 Filed 01/04/23 Page 23 of 46
`
`67. Based on information from Chandran (via Davidson), Glaspie
`
`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.
`
`
`
`- 23 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.24 Filed 01/04/23 Page 24 of 46
`
`70. Glaspie went so far as to falsely deny Chandran’s involvement. When
`
`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
`
`
`
`- 24 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.25 Filed 01/04/23 Page 25 of 46
`
`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:
`
`
`
`- 25 -
`
`
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.26 Filed 01/04/23 Page 26 of 46
`
`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.
`
`
`
`- 26 -
`
`

`

`Case 2:23-cv-10017-NGE-EAS ECF No. 1, PageID.27 Filed 01/04/23 Page 27 of 46
`
`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
`
`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

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket