SEC Seeks Trial of Swedish National Over Alleged Fraud That Took $3.5M in Crypto

Sep 30, 2020 at 09:37 UTCUpdated Sep 30, 2020 at 13:31 UTC.The U.S. Securities and Exchange Commission is demanding the trial by jury of a Swedish national for his alleged involvement in an international fraud that raked in millions in cryptocurrency.

According to a complaint filed Tuesday in New York's Eastern District Court, the securities watchdog is seeking damages on behalf of "Thousands of retail investors" from Roger Nils-Jonas Karlsson, 46.Karlsson "Enticed and defrauded" his victims through his purported company Eastern Metal Securities by promising "Astronomical returns" on their investments, the SEC alleges.

It further claims neither Karlsson nor EMS were ever registered with the commission, and neither had qualified for an exemption to registration.

Specifically, from around November 2012 through to June 2019, the SEC alleges Karlsson operated a fraudulent scheme called a "Pre Funded Reversed Pension Plan.".

During that time Karlsson used multiple fake identities to deceive investors, including some from the deaf community, out of millions of dollars, according to the complaint.

The plan promised a large payout that was tied to the value of gold if victims made an initial investment of $98 per the complaint, no such plan existed and no payouts occurred.

In total, Karlsson is alleged to have fleeced 2,200 victims from 49 U.S. states, the District of Colombia, Puerto Rico, and 45 other countries, netting himself $3.5 million via payments in bitcoin and other digital assets.

Misappropriated funds of around $1.5 million were used to purchase real estate in Thailand, his country of residence before being extradited to the U.S. to face charges.

The SEC asked the court for Karlsson to be restrained along with other members of the alleged fraud.

The regulator further seeks that Karlsson's "Ill-gotten gains" should be handed over, along with prejudgment interest and additional penalties.