SEC files fraud charges in Bitcoin and office space scams

SEC files fraud charges in Bitcoin and office space scams

A UK citizen living in New York is facing fraud charges brought by the US Securities and Exchange Commission (SEC) in relation to two bogus investment schemes, writes Paybefore (Banking Technology‘s sister publication).

Renwick Haddow allegedly reaped millions of dollars from investors in his supposed Bitcoin platform Bitcoin Store Inc and in Bar Works Inc, which offers office space in renovated restaurants and bars.

The SEC alleges in its complaint that Haddow created a brokerage firm without registering it with the agency, and that Haddow allegedly used sales representatives to cold-call potential investors and sell securities in Bitcoin Store and Bar Works.

Haddow provided materials to Bitcoin Store investors, selling it as “an easy-to-use and secure way of holding and trading Bitcoin”, the SEC alleges. However, the Bitcoin Store never had any operations and didn’t generate the sales it claimed.

Furthermore, the corporate address Haddow used for Bitcoin Store was his residential address without the apartment number, according to the SEC. Haddow allegedly diverted more than 80% of the funds raised by Bitcoin Store, transferring more than $5 million to accounts in Mauritius and Morocco.

Bar Works was sold as bringing “real vibrancy to the flexible working scene by adding full-service workspaces to former bar and restaurant premises in central city locations”, according to a Bar Works press release referenced in the complaint. Bar Works sold leases coupled with sub-leases that functioned like investment notes, according to the SEC.

The company also allegedly sold leases for more workspaces than existed in at least two locations. Investors poured more than $37 million into the Bar Works scheme, according to the complaint.

“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,” states Andrew M Calamari, director of the SEC’s New York regional office.

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