Patrick McDonnell, also known as Jason Flack, of CabbageTech Corp., plead guilty to one count of wire fraud for his scheme to defraud clients out of thousands of dollars. McDonnell presented himself as a veteran investor who would provide trading services and advice to virtual currency investors, all the while misappropriating investors’ funds to use for his own expenses.
Cabbage Tech Executive Defrauded Investors
McDonell’s fraudulent activity occurred between approximately November 2014 and January 2018, wherein he reportedly defrauded at least 10 victims out of the following: $194,000 in U.S. dollars, as well virtual currencies Bitcoin, Litecoin, Ethereum Classic, and Verge.
Neither McDonnell nor his company, CabbageTech, Corp., provided investment services, but instead falsified account balances to make clients’ investments seem profitable while stealing the funds for his personal use.
Cabbage Tech Executive Faces Prison Time
McDonnell is due to be sentenced on September 10th, where he faces 20 years in prison along with forfeiture and restitution to victims.
In a Commodity Futures Trading Commission (CFTC) civil action held last year, U.S. District Judge Jack B. Weinstein found McDonnell and CabbageTech liable for intentional violations of the Commodity Exchange Act. During that proceeding he was ordered to pay $1.7 million and to abstain from any future trading. McDonnell has been incarcerated since March.
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