A woman has admitted to lying to hedge funds that invested millions of dollars in her cryptocurrency products, US Attorney Philip R. Sellinger said.
Edith Pardo, 70, of Bloomfield, pleaded guilty to one count of conspiracy 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 his co-defendant Boaz Manor operated two blockchains, CG Blockchain and BTC Inc., and used them to promote a project called ComplianceGuard, which was intended to provide hedge funds with a blockchain-based auditing tool, according to the accusation. Pardo helped Manor hide that he was convicted of hedge fund-related crimes in Canada and Manor also changed his appearance and used aliases, according to court documents.
Pardo lied to investors about being rich and investing millions of her own funds in the company, authorities said. She also told investors, who were paying millions of dollars in fees for the product, that the blockchains had a team of well-reputed executives, authorities said.
In reality, the entities had no actual executives or staff and ComplianceGuard was hardly 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 the Blockchain Terminal, according to court documents.
Pardo's sentencing is scheduled for August 1.
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Nicolรกs Fernandes can be reached at nfernandes@njadvancemedia.com.
