Renwick Haddow was a citizen of the United Kingdom who was arrested in Morocco in July 2017. The Securities and Exchange Commission (SEC) had filed charges of fraud against him. He had been provisionally been arrested. Now he has been extradited to the US from Morocco to face charges at the Southern District Court of New York. The FBI made the announcement about the 49-year old UK national on Friday.
He controlled two companies and hid his involvement in both of them due to his past. He then used sales representatives to cold call potential investors and sell securities in the two companies. Using this approach he made material misrepresentations and misappropriated investment funds in two companies, Bitcoin Store and Bar Works. He has been accused of a $36 million fraud. Haddow adopted the alias “Jonathan Black” in order to hide his involvement and also claimed to have had an extensive background in finance.
The promotional material that was shown to the investors of both the companies looked legit. It spoke of senior executives which in reality did not exist and also misrepresented other key facts about the operations. Apparently, about 80% of the funds raised for Bitcoin Store, and $4 million from the Bar Works bank accounts were diverted by him to Mauritius and another $1 million to Morocco.
Up to 40 Years in Jail
The fake material of Bitcoin Store boasted of “an easy-to-use and secure way of holding and trading Bitcoin” and having generated several million dollars in gross sales. But according to SEC the company did not have real operations, to begin with, let alone generating the gross sales claimed. In 2015, for example, Bitcoin Store’s bank accounts allegedly received less than $250,000 in incoming transfers, none of which appear to come from paying customers.
“As alleged in our complaint, Haddow created two trendy companies and misled investors into believing that highly-qualified executives were leading them to quick profitability. In reality, Haddow controlled the companies from behind the scenes and they were far from profitable,” Andrew M. Calamari, Director of the SEC’s New York Regional Office, explained as the time.
Haddow has now been charged with two counts of wire fraud, each carrying a maximum sentence of twenty years in prison.