A Texas judge has ordered the arrest of former Rep. Senator David Schmidt after the Securities and Exchange Commission (SEC) brought a contempt motion against him.
The ex-Washington state senator and others have allegedly been involved in a crypto scam with the Meta 1 coin. Schmidt and Robert Dunlap didn’t appear at the April 21 hearing with the SEC, so Judge Robert Pitman had to order bench warrants for the two. Nicole Bowdler, who’s the third defendant, wasn’t given a bench warrant, but she has to appear in court by April 24.
Meta 1 Coin Scam Closely Investigated by the SEC
The SEC has conducted an ongoing case on the Meta 1 coin scam, which was backed by Schmidt and promised investors tokens backed by $2 billion in gold holdings or $1 billion in art. However, the tokens never existed, and on March 16 the SEC froze the cryptocurrency assets, charging Schmidt and his collaborators with fraud. This didn’t stop the scammers, who continued to tout and sell Meta 1, after raising, according to the SEC, more than $4.3 million from investors.
Arrests and Not Fines for the Scam to Not Continue
Judge Pitman decided on arrest warrants for Schmidt and Dunlap, saying that:
“If incarcerated, Dunlap and Schmidt will be unable to continue Meta 1’s operations, create marketing videos, or email their putative investors.”
The US Marshals Service has to bring both crypto scammers into the Western District of Texas federal custody. All the case’s defendants are controversial personalities. After Schmidt no longer got re-elected for his Washington seat in 2006, he was charged with misspending more than $40,000 on his campaign, so he had to pay a $10,000 fine. In spite of being famous for his involvement in all sort of illegal activities, the former senator wasn’t the one to start the crypto scam. It was Dunlap and Bowdler who launched it back in April 2018. However, Bowdler didn’t play a too big of a role in the scheme, this being the reason why she wasn’t issued an arrest warrant.