Lobbyist Abramoff Charged in Cryptocurrency Case

(CN) — Former Washington insider and longtime lobbyist Jack Abramoff was charged Thursday for his role in a cryptocurrency fraud scheme, and has already made a deal with prosecutors to plead guilty.

Abramoff is accused of conspiring to commit wire fraud alongside Rowland Marcus Andrade, the head of a National AtenCoin Foundation, which developed a new cryptocurrency called AML BitCoin that Andrade claims to have created. Andrade touted it as a new and improved bitcoin with anti-money laundering, anti-terrorism, and theft-resistant properties. None of the features existed, according to a separate complaint filed against Andrade by the U.S. Securities & Exchange Commission on Thursday.

According to the Justice Department’s indictment against Andrade unsealed June 22, Andrade began raising money for his new currency in 2017, and along with Abramoff orchestrated a false campaign that claimed the National Football League rejected an ad they wanted to run during the 2018 Super Bowl extolling AML BitCoin as impervious to North Korea’s hacking efforts, because its unflattering depiction of the North Korean leader Kim Jong-un was too politically controversial. 

In fact, the indictment says, Abramoff and Andrade never submitted the ad for review by the NFL because they knew the NAC Foundation didn’t have the money to buy airtime. Yet the pair still spread the fabricated story on social media, in press releases and paid op-ed articles in order to promote their bitcoin to potential buyers. 

Andrade’s indictment also says he misappropriated the funds he raised from investors, stealing more than $730,000 to buy a new house, $69,000 to buy a Cadillac Escalade, $60,000 to buy a Ford F250 truck, and $226,150 to buy property for his father. AML BitCoin’s initial offering raised at least $5.6 million from 2017 through 2018, according to the SEC’s complaint.

Andrade and Abramoff also claimed in 2017 that NAC Foundation had been talking with the Panamanian government about incorporating AML BitCoin into its transit fee payment system, telling prospective investors that NAC had a deal in place with the Panama Canal Authority where AML BitCoin would be the only digital currency accepted for passage fees through the canal. This turned out to be quite an overstatement, according to both the indictment and SEC complaint.

Authorities arrested Andrade on June 23 in Texas. He is scheduled to appear in federal court in San Francisco on July 1. He faces a maximum of 20 years for one count of money laundering and 20 years for wire fraud.

Abramoff has a storied reputation as a crook. In 2008, he was sentenced to four years in prison for tax evasion and bribing public officials. Among his most disreputable exploits was a scheme to defraud several Native American tribes out of millions of dollars for lobbying services, padding their bills while disparaging them to his secret partner Michael Scanlon.

In addition to conspiracy to commit wire fraud, Abramoff was also charged Thursday with failing to register as a lobbyist when he was retained by a marijuana industry client. The Justice Department also says an undercover agent posed as a businessperson in June 2017 to retain Abramoff’s services, and he lobbied a federal elected official without having first registered as a lobbyist.

Abramoff faces up to five years in prison.

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