Ex-con hedgie Boaz Manor charged in $30M bitcoin fraud scheme

By January 17, 2020 Bitcoin Business
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Boaz Manor pictured in 2007. Toronto Star via Getty Images

A convicted hedge-fund swindler assumed a fake name and donned a disguise to lure investors into a $30 million bitcoin fraud in New York that spanned two years, the feds alleged on Friday.

Boaz Manor — a 46-year-old entrepreneur who got a four-year prison sentence in Canada in 2010 after misappropriating more than $100 million from his hedge fund — was accused of the elaborate scheme in explosive charges Friday by the Justice Department and the Securities and Exchange Commission.

Released early from prison in 2012, Manor got a lifetime ban from the securities industry. Nevertheless, around 2015, he appeared to be laying the groundwork for a comeback — by posing as somebody else.

According to the SEC’s complaint, Manor darkened his blond hair and grew a beard. After trying on aliases like “Jay Mills” and “Jay Belzberg,” Manor appears to have settled on the name “Shaun MacDonald.”

By 2017, MacDonald had become a player on the frothy New York crypto scene, according to an exclusive December 2018 report from bitcoin news site The Block Crypto, which first exposed the bizarre scheme.

On one hand, MacDonald tried to keep a low profile, calling himself an adviser at two companies he had actually founded, according to the report. At the same time, however, MacDonald was raising eyebrows with his boasts as he began to promote his new cryptocurrency venture, CG Blockchain, according to the report.

Among other things, MacDonald bragged that he had entered into talks to buy SkyBridge Capital, the fund founded by former White House communications director Anthony Scaramucci, the report said.

Court papers say MacDonald then enlisted New Jersey attorney Eileen Pardo as an associate to begin marketing his “Blockchain Terminal” — a bitcoin-based version of the Bloomberg Terminal, the pricey, subscription-based information service that’s ubiquitous on trading floors.

Manor remains at large and Pardo was arrested Friday, according to Newark federal prosecutors. Both have been charged with conspiracy, wire fraud and securities fraud. According to the feds, they never registered the securities they were selling to investors — even as they fibbed about the capabilities of their product and falsely claimed 20 hedge funds were paying nearly $1 million a year for it.

CG Blockchain’s employees, meanwhile, had grown suspicious of the increasingly outsize role of “adviser” Shaun MacDonald, whose alleged photo was first published by The Block Crypto, showing what appears to be a bearded, reddish-haired Manor seated at a desk. In late 2018, CG Blockchain staffers connected the dots after coming across old photos of Manor.

“I Googled Boaz Manor and I said ‘Holy s–t.’ Not for a second did I think it was anyone but him,” a hedge fund manager who knew MacDonald told The Block Crypto.

Shortly after the explosive report was published, Manor — having shaved and let his blond locks return — recorded a YouTube interview denying the allegations and pointing the finger at a competitor.

Manor — whose hedge fund Portus Alternative Asset Management had managed $800 million before it shuttered — also denied pretending not to be Boaz Manor and said he had been honest with anyone who asked.

“If anyone needs to know that my given name is Boaz Manor,” he tells the interviewer, “I disclose it.”

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