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$45 Million Coindeal Fraud Case Spurred to Trial by Judge

Key Points:

The SEC secured default judgments against Garry Davidson and Linda Knott for their roles in a $45 million CoinDeal fraud case.
The defendants misled investors with false promises of returns from blockchain technology sales, leading to charges under securities laws.
Judge Shalina D. Kumar’s rulings advance legal proceedings, emphasizing regulatory efforts to combat crypto fraud and protect investor interests.

This week, the U.S. Securities and Exchange Commission (SEC) secured significant legal victories in the case against individuals involved in a fraudulent $45 million cryptocurrency scheme known as CoinDeal.

Court Issues Default Judgments in $45 Million CoinDeal Fraud Case

The U.S. District Court for the Eastern District of Michigan issued default judgments against Garry Davidson and Linda Knott, who failed to appear in court to defend themselves.

The SEC‘s case alleged that Davidson and Knott, along with other defendants, misled investors with promises of substantial returns from the sale of blockchain technology in the CoinDeal fraud case. Arline Woodbury and Joyce Holverson, downstream promoters, allegedly raised over $3 million by falsely portraying the imminent sale of this technology.

Judge Advances Legal Proceedings Amid Regulatory Efforts

In May 2024, Judge Shalina D. Kumar granted motions advancing legal proceedings CoinDeal fraud case, despite objections and ongoing criminal cases in Nebraska. The U.S. Department of Justice’s request to stay discovery in the civil case was also approved, preventing potential prejudice and safeguarding defendants’ rights.

Davidson and Knott were found guilty of violating securities laws, including registration and antifraud provisions. As a result, they are permanently barred from future violations, prohibited from holding officer or director roles, and required to pay substantial disgorgement and civil penalties.

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Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.