Cryptocurrency – A Good Financial Investment? 

Meet the Barksdale’s—the All-American family with an international flair who try to strike it rich in their 40’s. U.S. citizen, sister Tina (JonAtina Barksdale), lived in Hong Kong, while brother John Barksdale called Thailand home. Their story combines the elements of a good Texas-sized fish tale with the thrill of a multi-level marketing scheme, all in the name of cryptocurrency. Keep reading to uncover how they defrauded approximately 20,000 financial investors out of $124 million in less than two years.

Tina and John weren’t selling just another digital coin, Ormeus Coin. They launched a financial investment scheme through Ormeus Global, a multi-level marketing company. They offered subscription packages to investors which included a cryptocurrency training portal, pooled investment funds for a digital asset trading system, and the digital coin as well. SEC Complaint

The siblings made a lot of promises, but one of the more suspicious ones was touting a 160% passive return on the initial investment. One way they purported to guarantee the investment’s value was by agreeing to “permanently place 40% of the profits of the digital asset mining business into digital asset wallets.” SEC Complaint

In other words, when other coins like BitCoin were mined on their technology, some of the profits would be maintained to support the investment’s value. And, the Barksdale’s told investors that almost all the balance of profits would be used to purchase additional digital asset mining and equipment. SEC Complaint

How Easily $500,000 Becomes $190 Million

In order to convince investors of the validity of the digital asset mining scam, the Barksdale’s displayed a digital wallet on their website which was supposed to belong to Ormeus. At one point during the end of the fraudulent activity, the wallet displayed on their site had 3,081 Bitcoins valued at $190 million. Their actual wallet had only seven Bitcoins worth under $500,000. SEC Press Release

In addition to trading and mining digital coins on their own platform, Ormeus Coin was purchased and traded on the trading platform Cryptopia. The Barksdale’s directly issued 36 million coins to around 12,800 investors. At its peak, the value of those coins was $52 million. SEC Complaint

Road trips can be lucrative and tricky. One way John Barksdale sold subscriptions was by hosting roadshows internationally to attract investors. In November 2017, Ormeus hosted a Hong Kong roadshow where in just one week, Ormeus Global raked in $5.7 million worth of subscription packages. Not bad for a week’s work. Here are a few tricks that seemed to work in their favor.

  • Price Manipulation. Before the roadshow, Barksdale and others in the inner circle would trade among themselves to drive up the price. John was able to raise the price to a dollar almost on his own. The team, however, got the coin’s value up to $5.30 on November 19, 2017.
  • Lie or Omission? At the show, Barksdale staged an event where he purportedly bought $250 million of digital asset mining equipment with an initial deposit of $10 million. In fact, the contract was not binding and was more like an intent to purchase when terms were ironed out in 30 days.

As roadshows and webinars continued, so did the fraud. The $250 million contract was mentioned, again and again, there was more price manipulation, and the third party’s wallet remained on the website as a false representation of Ormeus’ asset. SEC Complaint

Marketing Matters

In addition to Barksdale’s initial tricks, they upped their marketing game by producing videos and a white paper. One video displayed a facility with mining equipment that was much more than what was used to mine Ormeus Coin.

And the whitepaper and press releases included blatantly false financial data.

You know what comes next. Defendants took millions of investors’ dollars for their own benefit, including purchasing real estate and traveling internationally.

Investors, Before Jumping Into A Financial Investment, Be Wary Of Unusually High Returns

Trading cryptocurrency is risky, but jumping into investments for mining projects and package deals ups the risk considerably.

  • Make sure the investment is registered with the SEC or state securities commission. Ormeus investment and coin were not registered.
  • Ask to see audited financials. Have your lawyer or CPA validate those records.
  • Don’t believe everything you see and hear. It’s so easy to believe messages in writing, in videos, and in written documents. Investigate before investing.

We love a good Texas tale (or fish tale), but not when it comes to investments. When exploring financial investment opportunities in securities, oil and gas, real estate, or cryptocurrency, do your research. Check the history of the people in the deal, as well as any past or pending lawsuits. Read all documents before signing. Don’t invest in risky endeavors without doing your due diligence.

Contact An Experienced Cryptocurrency Fraud Attorney Today

We hope all your real estate, cryptocurrency, and oil & gas investments are safe and profitable. But if you find yourself searching for an experienced Cryptocurrency Fraud Attorney, oil and gas litigation lawyer, or commercial litigation lawyer, we are here to help.