Convictions secured in rare cryptocurrency boiler room case

Associate Tenant Mary Cowe has secured convictions in a rare cryptocurrency boiler room case where the prosecution proved that no cryptocurrency was being allocated to investors.

Following a 5 week trial, Ross Jay, 33, and Michael Freckleton, 37, were found guilty of conspiracy to defraud and sentenced on July 28 at Southwark Crown Court to six years and six years and six months, respectively.

The scam revolved around the defendants fraudulently asserting that they were reserving allocations of a pre-launch cryptocurrency called “Telecoin” for elderly investors. Operating under the guise of a company named Digi Ex, they targeted potential investors through cold-calling, convincing them to part with their funds in exchange for non-existent digital assets. The Prosecution case was that Michael Freckleton had set up Digi-Ex and instigated this enterprise which was fraudulent from the outset. Ross Jay acted as a prolific salesman for Digi-Ex, calling some elderly investors more than 400 hundred times over the period of 18 months. Using the alias of “Oliver Gunn” he be-friended them and then abused their trust, inviting investments from those who did not have computers or any other means of checking the corporate story sold to them by Digi-Ex. An analysis of the Digi-Ex bank accounts revealed that investors’ money had been used to pay for the defendants lifestyles.

Between 2015 and 2017, £409,493 was deposited into Digi Ex bank accounts from investors traced by the police, with the Judge concluding that a further £65,000 from unknown sources had also been deposited by other investors who could not be traced. The Court heard that 3 traced investors had died before the case came to trial with others unable to give evidence due to the problems of old age. The investigation revealed that the defendants had exploited the allure of the emerging cryptocurrency market, deceiving victims and siphoning their money for personal gain without providing any credible investment services. The Prosecution successfully demonstrated the defendants had hidden behind, what the Judge described, as “the smoke and mirrors” and “the reams of jargon” in their exercises of dishonesty.

Associate Tenant Mary Cowe specialises in Fraud both prosecuting and defending large-scale complex cases. Read more: [Mary Cowe Profile]. She was instructed by CPS Serious Economic, Organised Crime and International Directorate (SEOCID).

News stories:

[Standard]

[City of London Police]

[Law360]

[Cryptopolitan]