District of New Jersey | Essex County woman admits role in $25 million securities fraud scheme involving blockchain technology company
NEWARK, NJ – An Essex County, New Jersey woman today admitted her role in convincing victims to invest over $25 million in cash and cryptocurrency, US Attorney Philip R. Sellinger announced.
Edith Pardo, 70, of Bloomfield, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler to an indictment charging her with one count of conspiracy to commit wire fraud, three counts of wire fraud and one count of securities fraud in connection with a blockchain technology company.
According to documents filed in this case and statements in court:
Through CG Blockchain Inc. and BCT Inc., Pardo and her co-defendant, Boaz Manor, pitched a product called ComplianceGuard that allegedly provided hedge funds with a blockchain-based auditing tool. Before starting these entities, Manor was convicted and served a prison sentence in Canada for crimes stemming from his former role as a hedge fund manager. While raising money for these new entities, Pardo Manor—who changed his appearance and used aliases—helped hide his true identity and criminal past from investors.
Pardo acted as the face of the entities and, along with Manor, told potential investors that Pardo was independently wealthy and provided millions of dollars in seed money, when in fact she was neither wealthy nor an investor. Pardo and Manor also falsely claimed that: Pardo was the sole owner of the units; “Shaun MacDonald” (one of Manor’s aliases) was only a consultant; a team of well-qualified managers ran the units; and several hedge funds paid millions of dollars in fees to use ComplianceGuard. In reality, the entities had no real managers, charged no fees, and ComplianceGuard was barely deployed or used.
In 2017, Pardo and Manor relied on many of the same misrepresentations to raise over $25 million through an initial coin offering, or ICO, for a new product called Blockchain Terminal that allegedly allowed hedge funds and financial institutions to trade and manage cryptocurrency. But after investors began to learn about Manor’s true identity and criminal past, Manor admitted to hiding this information to avoid ruining his new companies.
Manor is currently on the run.
The conspiracy and wire fraud charges in the indictment carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The securities fraud count carries a potential sentence of 20 years in prison and a $5 million fine. Sentencing is scheduled for 1 August 2023.
United States Attorney Philip R. Sellinger credited special agents of the FBI, led by Special Agent James E. Dennehy in Newark, with the investigation that led to today’s plea.
The government is represented by Assistant US Attorney Blake Coppotelli of the US Attorney’s Office Economic Crime Unit in Newark.
The charges and allegations in the indictment relating to Manor are allegations only and he is presumed innocent unless and until proven guilty.
