CabbageTech CEO Indicted in New York for Defrauding Crypto Investors

The 46-year-old owner of a firm called CabbageTech has been charged in New York with duping investors out of over $200,000 in cryptocurrency and cash.

The U.S. Attorney's Office of the Eastern District of New York announced Tuesday that it has unsealed a nine-count indictment charging Patrick McDonnell, also known as "Jason Flack," with wire fraud and has arrested him.

Between November 2014 and January 2018, McDonnell allegedly represented himself as an experienced cryptocurrency trader, promising customers that he would provide them with trading advice, as well as buy and trade cryptocurrency on their behalf.

McDonnell is said to have used his Staten Island-based company, CabbageTech Crop., also known as Coin Drop Markets, to solicit investments through social media platforms, including Facebook and Twitter.

Neither McDonnell nor CabbageTech provided any investment services, according to the indictment.

In total, McDonnell defrauded at least 10 victims of at least $194,000 in cash, 4.41 bitcoin, 206 litecoin, 620 ethereum classic and 1,342,634 verge, according to the indictment.

If proven guilty and convicted, McDonnell faces a jail term of a maximum 20 years.

McDonnell was previously sued by the U.S. derivatives regulator, the Commodity Futures Trading Commission, in January 2018 for absconding with customers' crypto assets.

Later in July, the CFTC wrapped up the case against McDonnell and was seeking a permanent injunction against him.

McDonnell at the time gave up the fight saying he did not have the resources or the ability to continue contesting the charges brought against him.