A woman has admitted to lying to hedge funds that invested millions of dollars into her cryptocurrency products, U.S. Attorney Philip R. Sellinger said.
Edith Pardo, 70, of Bloomfield, pleaded guilty to one count of conspiring to commit wire fraud, three counts of wire fraud, and one count of securities fraud in connection with her blockchain technology companies, prosecutors said.
Pardo and her co-defendant Boaz Manor operated two blockchains – CG Blockchain and BTC Inc. – and used them to tout a project called ComplianceGuard, which was meant to provide hedge funds with a blockchain-based auditing tool, according to the indictment. Pardo helped Manor conceal that he was convicted of hedge fund related crimes in Canada and Manor also changed his appearance and used aliases, court documents said.
Pardo lied to investors about being wealthy and investing millions of her own funds into the company, officials said. She also told investors, who were paying millions of dollars in fees for the product, that the blockchains had a team of well-credentialed executives, authorities said.
In reality, the entities had no real executives or staff and ComplianceGuard was barley distributed or used, according to the indictment.
The defendants also relied on similar misrepresentations to raise $25 million in capital for their initial coin offering of a product called Blockchain Terminal, court documents said.
Pardo’s sentencing is scheduled for Aug. 1.
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Nicolas Fernandes may be reached at nfernandes@njadvancemedia.com.
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