U.S. Government Exposed: Part One: Why, Who, & How
Setting the stage for weaponization - U.S. v. Crater, U.S. District Court, District of Massachusetts, No. 19-cr-10063
If you missed our initial press release, click here to read it.
If you missed the press release for Part One of the expose, click here to read it.
Tl;dr (“Too Long, Didn’t Read”) Version
Why Does This Matter? Why Should I Care?
This case is a “bellwether” case in the cryptocurrency industry, meaning that the outcome will shape all cases going forward.
Multiple government agencies - The FBI, DOJ, SEC, and the Commodity Futures Trading Commission (CFTC), have colluded to choose winners and losers in the cryptocurrency industry.
Randall Crater and his defense team presented extensive exonerating evidence, which resulted in witnesses being intimidated, evidence being suppressed, and an attempt to financially ruin Crater and his family.
"Government Expert" Patricia Gomersall basically lied and/or misrepresented evidence in a sworn deposition and was allowed to get away with it. This sets a dangerous precedent - weaponization of government agencies.
What Should I Do Next?
Read this expose, and review the documents linked to in it.
SHARE IT WITH AS MANY PEOPLE AS POSSIBLE, SHARE IT ON SOCIAL MEDIA, SHARE IT WITH NEWS OUTLETS.
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“I didn't know that you could be charged and convicted on something for a company that you don't own or control.”
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This was the opening line of our initial announcement - sounds crazy right?
When it comes to the Federal Government of the United States, their alphabet agencies, money, and power, nothing is too crazy.
Enter Randall Crater. As it turns out, Mr. Crater appears to have a strong sense of justice - he also committed the cardinal sin in dealing with the government: he fought, proclaimed himself innocent, and called for due process.
That call would lead to the strong-arm of the law showing itself, along with death threats against Crater and his family, public ridicule, stalking, and humiliation.
In this expose, you will find links to documents that show motions, depositions, and sworn testimony provided to us by whistleblowers that documents the gross negligence, willful ignorance, withholding of evidence, and conspiracy between multiple government agencies - The Security and Exchange Commission (“SEC”), the Department of Justice (“DOJ”) and the Commodity Futures Trading Commission (“CFTC”) supported by the Federal Court System. All working together to weaponize the legal system.
The reasons? Power and money.
The U.S. vs Crater case is “bellwether” - meaning it will set precedence for all cases that come after it. A win by the CFTC would give them, in essence, complete control and oversight of cryptocurrency.
That’s a LOT of power, isn’t it?
The CFTC sure thinks so. How much you may ask?
Enough for the agency to testify to the Baking, House and Urban Affairs Committee of Congress and to utilize the case of U.S. vs Crater to make their case for hundreds of millions of dollars in funding.
Which they received.
Yes, the CFTC leveraged a case which was built on hearsay and, in fact, should have been thrown out, to obtain taxpayer (your) funds.
We’ll break down the contentions made by the CFTC, which led to what is, in essence, a show trial for political and financial gain. We’ll also show how one motion for sanctions, that was not allowed to see the light of day, would have completely exposed the CFTC’s methods when someone stands up to fight them - squeezing targets through crippling asset freezes, random closing of bank accounts, and supposed “victims” of fraud that either do not exist or were never interviewed or called to testify.
Yes, you read that correctly. Exonerating evidence in a bellwether case was not allowed to see the light of day.
Of the evidence that SHERLOC has reviewed and will share, perhaps the most disturbing of all may be the deposition of the CFTC’s star witness, expert Patricia Gomersall. As you will see in the excerpts from her deposition, Gomersall performed little to no due diligence while making statements to the contrary, made unsubstantiated claims, and admitted that she had no basis to believe that the MBC Currency was not backed by gold, or that there were actually 28 fraud victims.
The cover up ends and the process of justice begins now.
MEET THE PLAYERS
While the trial in question featured only one defendant (Crater), the ecosystem of players is extensive:
John Roche, Owner/CEO of My Big Coin Inc., heir to the Disney fortune, and long time friend of Harmonie International Owner/CEO Bill Donohue.
Mr. Roche not only designed and controlled the MBC website and social media, he advised the government that he indeed owned MBC. His statements to FINRA, the FBI, and the Postal Inspector tell a conflicting story.
Bill Donohue, Owner/CEO of Harmonie International and long time friend of My Big Coin Inc., Owner/CEO John Roche.
In tandem with Roche, Donohue handled the logistics for gold backing My Big Coin. He also forged documentation on the gold that was supposed to back My Big Coin, and defrauded Randall Crater in the process.
Randall Crater, Owner/Founder of Greyshore Technologies. The government alleges that Crater was the founder and owner of My Big Coin, yet provided no evidence to actually support the claim. Crater licensed technology and provided technical assistance to Roche and My Big Coin, and was a minority shareholder in the company. Mr. Crater was also defrauded by Bill Donohue after putting up money for gold.
Adam Tracy, Lawyer. Tracy reported directly to Roche.
Michael Kruger, Associate. Kruger advised the FBI on multiple occasions that Roche ran and controlled MBC, and offered to provide extensive documentary evidence.
Mark Gillespie, Associate. Gillespie also advised the FBI that Roche ran and controlled MBC.
My Big Coin or MBC for short was established in 2013 by John Roche. Its business model, like most crypto currency businesses, was to utilize blockchain technology in numerous business applications like gaming and the equally growing cannabis industry. The selection to name My Big Coin, which was similar to the largest and well-known crypto currency in the world, Bitcoin, was probably a mistake in hindsight, but nonetheless, all efforts to grow a fully functional business and currency was the goal.
In 2014, Roche, as the owner and CEO of MBC, retained Randall Crater to build the technology to support the business model. Also originated and added to MBC was My Big Coin Pay, which would add a layer of utilizations and revenue such as ATM machines and credit cards backed by the new currency. On its twitter account on January 21, 2014, MBC stated that a price of $23.17 was transacted.
MBC was being heavily marketed and promoted and peer to peer transactions were being transacted and disclosed by John Roche in its own website, and through social media such as twitter. According to Roche, like Bitcoin, MBC was going to limit the number of “coins” to 30,000,000. Users were being urged to create accounts and “wallets” to hold their MBC.
In one of the biggest announcements made, on March 6, 2014, MBC announced that they had created a partnership with a company who would back all MBC coins with gold.
This was an incredible declaration. MBC was now stating that MBC was being transacted at $52.88.
Additionally, another announcement was made that owners could obtain a VISA/Mastercard backed by MBC and used in any store that accepted MBC. They also announced that an IPO was imminent and they wanted to become the #1 crypto currency in the world. Shortly thereafter, MBC was disclosing that transactions were being made at over $102. In November, MBC claimed that their agreement with a credit card company was finalized and MBC was being transacted at $121.38.
However, in mid-year 2014 while MBC’s attorney Adam Tracy was trying to conduct a reverse merger by acquiring a dormant company, FINRA started an investigation into MBC inquiring if they were selling shares not registered or exempted from registration.
By year’s end, FINRA had written a letter to the SEC stating that their investigation was completed, and they were not going to move forward with any further proceedings. Subsequently, the SEC did not pursue any further investigations.
What FINRA did do, and is the normal course of business in Washington, is pass along the case to the CFTC for investigation as well. It is usually not clear how certain cases get “moved to the top of the pile,” but inter-agency “recommendation” is a certain way it will rise to the top.
Roche and My Big Coin continued to promote MBC and My Big Coin Pay. Crater, through his licensing and consulting agreement, continued to build the infrastructure.
The IPO never took place as the company that Tracy was trying to reverse merger with, Shot Spirits, was not allowed by the Depository Trust & Clearing Corporation (DTCC) to sell its shares again.
In 2017, the CFTC deposed a My Big Coin owner both in coin and an investor in the company named John Lynch. Lynch was a notable real estate attorney in Massachusetts for over 40 years and was a former Assistant District Attorney in Boston for Suffolk County. He then had an unsuccessful attempt at running for State Senate, but was able to land a job for the City of Boston defending various state agencies. In Lynch’s deposition, he clearly states that he received coins for not only him, but for his law partners and family.
On January 16, 2018, the CFTC filed a civil complaint in the Federal Court of Massachusetts (18CV-10077). It named Randall Crater and My Big Coin as Defendants as well as an MBC salesman named Mark Gillespie. It also named Crater’s mother, wife and sister as relief defendants. It also named Greyshore entities controlled by Crater as marketing and technology companies.
Most notably, the suit did not name the actual CEO of MBC John Roche.
The suit basically stated that MBC and MBC Pay were “a Ponzi scheme” crafted by Crater and all representations made on social media were false including that MBC was backed by Gold and the claim that it had entered into an agreement with Visa/Mastercard was false. It stated that no “wallets” were ever created in the MBC Exchange through its website, and it did not trade on any other exchange. That proceeds collected from these fraudulent sales were then sent via wire and cheek to bank accounts controlled by Crater, his sister, mother and wife.
Gillespie is claimed to have controlled the Facebook page of MBC and also made false claims. It does not state who controlled the twitter account or who authorized the press releases.
WARNING: Legalese ahead!
According to the Federal Rules of Civil Procedure, Plaintiff’s initial complaint and allegations are to be construed as “true” by the Courts until such time as they are asked to back their claims. First and foremost, though, was the issue of whether or not that specific court have jurisdiction to even hear the case. On May 4, 2018, Crater and the Relief Defendants filed a motion under Rule 12(b) that the Court did not have jurisdiction to hear the case because My Big Coin was not a “commodity” as defined in the Commodity Exchange Act.
The motion was written by Laura Greenberg-Chao and Katherine Copper who had over 20 years’ experience in the derivatives markets and had actually worked for the CFTC as a Senior Trial attorney.
This was a crucial issue though because granting jurisdiction to the CFTC under the current CEA before Congress could decide, would grant authority not through elected officials’ legislation. On September 26, 2018, Judge Zobel ruled in a decision laid out over 11 pages that My Big Coin was a commodity.
She referenced a precedent case of CFTC v McDonnell, 287 F. Supp. #d 213, 228 (EDNY 2018), which granted jurisdiction to the CFTC, but that case involved Bitcoin which had already been granted regulatory permission to trade on a futures exchange.
That sole decision opened the door for the CFTC to now submit dozens of cases over the past year.
Just before Judge Zobel’s decision, the CFTC filed an amended complaint with the Court and now named MBC Owner and CEO John Roche as well as a man named Michael Kruger. MBC and MBC Pay are now defunct entities.
All individual named Defendants, Roche, Gillespie and Kruger have defaulted. Only now Crater was left as an individual defendant. Noticeably the “Ponzi Scheme” allegation against Randall Crater was omitted from the amended complaint.
That allegation earlier led to government press releases and pacer postings not only stating that Crater organized a Ponzi Scheme, but improperly publishing contents of the FINRA investigation.
Most notably among those contents was a credit reporting agency document asserting that Crater had an extensive criminal record in several States. That document was not only false but plainly listed on its face were the words “not for public dissemination”.
The government retracted the “Ponzi Scheme” knowing that it had no evidence to support that allegation but left posted false and damaging information on Crater thereby causing holders of My Big Coin to erroneously believe that Crater possessed a significant criminal record.
Ironically, a day prior to Zobel’s decision, a lead investigator for the CFTC named Patricia Gomersall was deposed in the civil case. She clearly stated that FINRA had recommended the case to the CFTC through her supervisor Paul Hayeck.
She was the lead investigator with 31 years of experience and had submitted a declaration to the court under penalty or perjury, but in her deposition could only name John Lynch and another “victim” Peter Bell as one of 28 victims stated in the complaint.
In fact, in reading the deposition it was frightening to see how little investigation was actually done before ruining a company and numerous lives through the mere submission of allegations.
It could be argued that the mere submission of allegations without thorough investigation created more victims as the price of MBC had a high price of over $500 in 2017 and had now fallen to zero.
With the CFTC case in trouble after Gomersall’s admissions of faulty investigation and sole reliance of being presented the case by FINRA, the CFTC did what they always do when in trouble, call out the big guns.
So, on February 26, 2019, the US Attorney’s office in Massachusetts indicted Crater on four counts of wire fraud and 3 counts of Unlawful Monetary Transactions. The case was submitted by AUSA Jordi Di Llano in Massachusetts, but the real case was being prosecuted in the DC Office by Caitlin R. Cottingham, a trial attorney in the fraud section of the criminal division.
This case is a perfect example of collusion of multiple federal agencies not in the pursuit of the truth, but to lay claim in a new asset class by picking on low hanging fruit.
Support of that is the fact that Roche and Gillespie are named as Individuals 1 & 2 in the indictment, but not indicted themselves.
It is the DOJ’s model to apply pressure to individuals as unindicted co-conspirators to cooperate and testify against any leftover Defendants. This model is partially why according to the latest statistics provided by the US Sentencing Commission that 97.4% of all Federal Defendants plead guilty.
THE STATEMENT FROM THE DOJ
Let’s begin to breakdown the statement that the DOJ made in the case against Crater:
From the DOJ website:
“According to court documents and evidence presented at trial, Randall Crater, 51, of East Hampton, founded My Big Coin Pay Inc. (My Big Coin)…”
“… a purported cryptocurrency and virtual payment services company headquartered in Las Vegas, Nevada, and offered virtual payment services through a fraudulent digital currency, “My Big Coins,” which he marketed to investors between 2014 and 2017 using misrepresentations about the nature and value of Coins…”
“… Crater and his associates falsely claimed that Coins was a fully functioning cryptocurrency backed by $300 million in gold, oil and other valuable assets. Crater also falsely told investors that My Big Coin had a partnership with MasterCard and that Coins could readily be exchanged for government-backed paper currency or other virtual currencies. Crater promulgated these misrepresentations through social media, the internet, email and text messages…”
“…In reality, Coins were not backed by gold or other valuable assets, did not have a partnership with MasterCard and were not readily transferable…”
We’ll break down these points in more detail in part two of this expose, but it is critical at this point to clearly understand the foundation that the CFTC built their case on, and who they relied on to build it.
THE CURIOUS CASE OF PATRICIA GOMERSALL
Patricia Gomersall is a lead investigator for the CFTC with 31 years of experience. She submitted a declaration to the court under penalty or perjury in the case against Crater, that was the foundation of the CFTC’s allegations and eventual prosecution in Federal Court.
With documentation of the full Gomersall deposition (linked here) and the sealed Memorandum in Support of Certain Defendants Motion for Sanctions (linked here) provided by whistleblowers, we can see that not only are Gomersall’s statements in question, but that the CFTC and its attorneys prevented the court from making an informed decision and obtained relief in the form of what were crippling asset freezes against Crater and his family by blocking evidence.
According to the filing, the CFTC:
Alleged that the virtual currency in this case was not backed by gold, they failed to disclose evidence that it was;
Alleged that a credit card tied to the virtual currency in this case did not exist, they failed to disclose their knowledge of a contract establishing such a card;
Alleged that the reported trading prices of the virtual currency in this case were false and illusory, they failed to disclose the evidence that the virtual currency’s price was in fact determined by trading in the marketplace.
The filing goes on to state that “To be blunt, the CFTC’s conduct during the ex parte proceeding and the effect of that conduct on the ensuing preliminary injunction is nothing short of attorney misconduct. It is a violation of the Massachusetts Code of Professional Responsibility applicable to all attorneys who practice in the United States District Court for the District of Massachusetts. It is especially concerning because the attorneys who engaged in this misconduct represent an agency of the United States.”
In each motion for relief, the CFTC cited only one source of evidence - the Declaration of Patricia Gomersall.
MISREPRESENTATIONS - PREPAID MASTERCARD
The evidence of allegations from the CFTC are based on two alleged misrepresentations - that MBC had an agreement with TRUCASH aka DCR Strategies to issue a branded pre-paid Mastercard was false, and that statement that the price of the MBC currency was determined by the market were false - neither of which appear to be supported by evidence in the Gomersall Declaration.
In fact, the CFTC had evidence that directly contradicted their reliance on an unsigned letter stating that the contract for a branded Mastercard had been terminated. Gomersall admits this in her deposition, under oath:
The signed contract with DCR Strategies is linked here.
And full promotional materials showing the MBC Card and how it worked from TRUCASH are linked here.
This information, provided under oath, directly contradicts statements from the DOJ website, mentioned above.
MISREPRESENTATIONS - ALLEGED VICTIMS
The CFTC claimed that 28 MBC Customers were impacted. According to Gomersall’s deposition, the CFTC only took testimony from one customer:
MISREPRESENTATIONS - LACK OF BASIC UNDERSTANDING
In a disturbing twist, Gomersall, as a CFTC expert and foundation for the CFTC’s case, lacks a basic understanding of how virtual currencies work AND did not take steps to support her allegation that Crater or his co-defendants arbitrarily changed the price of the MBC currency :
From this, it appears that the CFTC - a government agency that is positioned to lead the governance of the cryptocurrency industry - relies on faulty foundations in the pursuit of positive outcomes (for them) in bellwether cases.
MISREPRESENTATIONS - NO INVESTIGATION OF MBC BEING BACKED BY GOLD
The statement from the DOJ, in part, says that “… Crater and his associates falsely claimed that Coins was a fully functioning cryptocurrency backed by $300 million in gold, oil and other valuable assets.”
Yet during her deposition, Gomersall states that she:
a. Was aware of a commitment from Harmonie International to back MBC Pay with gold;
b. Had no basis to believe that the MBC Currency was not backed by gold;
c. Did not investigate whether MBC currency was back by gold:
In concluding part one of this expose, it’s clear that “Might Makes Right” and “The Ends Justify the Means” when it comes the desire for power. We should also note that shortly after the jury verdict in the Crater case, the CFTC was front and center in a feature article, linked here.
That article reveals proposed bipartisan legislation from Congress to put the CFTC front and center in cryptocurrency legislation, increasing their support and funding.
It also shows how misinformed - or aligned - or complicit members of Congress and some in the crypto industry are in their support of the CFTC having oversight of the industry and that the foundations on which they propose and write legislation are based on are driven by false evidence, collusion, and conspiracy.
In part two of our expose, we will show how John Roche controlled MBC, how Bill Donohue forged documents for the gold backing MBC and defrauded Crater in the process, video proof that MBC was real and functioning, and how the CFTC used this case to get funded.
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