Alleged CabbageTech Crypto Fraudster Indicted on Nine Counts

"As alleged, the defendant defrauded investors by making false promises and sending them fraudulent balance statements, hiding the fact that he was stealing their money for his personal use."

Per the statement, McDonnell used "Smoke and mirrors" between November 2014 and January 2018 to defraud investors by portraying himself as an experienced cryptocurrency trader, promising trading advice, and buying and trading crypto on their behalf.

According to the DoJ, neither McDonnell nor CabbageTech provided investment services, rather he allegedly used investors' funds for his own purposes and sent clients falsified balance records.

When clients requested to withdraw their funds, McDonnell purportedly made excuses for why he could not pay them at the time.

McDonnell also allegedly operated under an alias as "Jason Flack."

The DoJ states that, should he be found guilty, he faces 20 years in prison.

In the press release, Donoghue notes the participation of the Commodity Futures Trading Commission in the investigation.

In August of last year, the CFTC won a court order to permanently ban McDonnell.

At trial, the judge ruled that McDonnell was operating a "Boiler room" to allegedly defraud investors and ordered him to repay the investments plus penalties.

On the grounds that he could not afford legal counsel, McDonnell reportedly briefly represented himself in court, after which he stopped attending the proceedings altogether.