The Securities and Exchange Commission has filed a lawsuit against John Barksdale and his sister JonAtina “Tina” Barksdale for the Ormeus Global scam.
The Barkdales are accused of stealing over $124 million using Ormeus Global’s ORME cryptocurrency, according to the regulator.
In June 2017, BehindMLM investigated and reported on Ormeus Global’s securities scam.
The Barkdales committed fraud from June 2017 through April 2018, according to the SEC’s lawsuit.
Defendants John and Tina Barksdale defrauded Ormeus Global, S.A. by offering and selling unregistered securities in the guise of subscription packages.
Beginning in June 2017… In the guise of the digital asset Ormeus Coin, defendants illegally marketed and sold unregistered securities.
The subscription packages, as well as Ormeus Coin, were never registered as securities with the Commission, even though they should have been under securities legislation.
John Barksdale is a US citizen who lived in Thailand previously. In simultaneous criminal procedures, he has been arrested.
Barksdale is suspected to have been extradited to the United States or to be in the process of doing so.
Tina Barksdale is a citizen of the United States who lives in Hong Kong.
She is John Barksdale’s sister and together with him, they ran Ormeus Global and Ormeus Coin.
Tina Barksdale worked at Ormeus’ Hong Kong office, where she was in charge of arranging the marketing movies the company used to establish itself as a real company and managing the company’s bank accounts.
John Barksdale was the face of Ormeus Global out of the two. Tina Barksdale was unfamiliar to me until I covered the SEC’s proceedings today.
The standard trading bot paradigm was Ormeus Global’s inaugural Ponzi scheme.
Ormeus Global promised a 160 percent return on investment with their “B2x89” bot.
… (Ormeus Global’s) trading system was not a proven system and was still in development for months after Ormeus Global began selling subscription packages, contrary to… claims.
As a result, Ormeus Global began promoting cryptocurrency mining, a classic Ponzi scheme.
Defendants told investors that Ormeus Coin’s value would be supported by other digital assets acquired through its digital asset mining activity.
They promised investors that Ormeus Coin will put 40% of its income from digital asset mining into digital asset wallets known as the “Ormeus Reserve Vault,” or “ORV,” indefinitely to strengthen the value of Ormeus Coin, making the Ormeus Global packages more appealing to investors.
While Ormeus Global did participate in mining, it was insufficient to keep the Ponzi scam afloat.
From February 2018 to January 2019, Ormeus Coin mined digital assets for less than a year.
During that period, the total revenue earned by the enterprise was less than $3 million.
Defendants, on the other hand, overstated the operation’s income as ranging from $5.4 million to $8 million per month at various periods.
Defendants further claimed that Ormeus Coin had digital asset mining equipment worth $30 million, $35 million, and $250 million when it had less than $1 million in operation.
The defendants battled to maintain the equipment running and profitable.
Mining revenues “would be utilized to buy further digital asset mining equipment and technologies,” according to Ormeus Global affiliates. That was not the case.
Indeed, after Ormeus Global’s mining period, the firm was losing money.
Between March 5 and June 1, 2018, the price of bitcoins fell by 35%, from around $11,600 per bitcoin to $7500 per bitcoin.
The corporation hosting the digital asset mining equipment in Utah delivered an email to Defendants on or about May 19th, 2018, summarizing the operation’s mining income, costs, and profits.
Ormeus Coin earned less than $9000 by mining digital assets in the previous 42 days.
Ormeus Coin’s mining equipment in New York and Utah was shut off on or around June 1, 2018, as the value of bitcoin continued to fall.
Defendants and Ormeus Coin made no investor disclosures and did not address any earlier misstatements concerning the company’s mining success.
Ormeus Coin’s mining equipment in Utah was turned back on or around November 12, 2018.
Ormeus Coin’s mining equipment lost around $115,000 between November 12, 2018, and January 12, 2019.
Ormeus Coin’s mining equipment in Utah was permanently turned down and put into storage in January 2019.
Investors were never informed about any of these incidents.
Ormeus Global said in a whitepaper issued in April 2019, four months after the mining equipment was shut off, that it had
It is one of the world’s largest digital asset mining businesses (and) it is mining digital assets in North America.
The Barksdales deceived investors by displaying a bitcoin wallet balance on ORV’s website.
Ormeus Global had nothing to do with this wallet, which belonged to an “unrelated third party.”
The balance on ORV’s website as of November 2021 was more than $190 million.
The assets in the genuine ORV digital asset wallets, on the other hand, were valued at less than $500,000.
The Barksdales blocked access to ORV’s website after learning of the SEC’s inquiry in December 2021.
A “roadshow” event performed in Hong Kong in November 2017 was another misleading marketing strategy used.
John Barksdale signed a $250 million deal for mining equipment during the occasion.
The contract was not legally binding, and no such transaction was ever made.
Wash trading, which is prevalent in MLM Ponzi schemes, was also employed to boost ORME’s trading value.
Before the roadshow, John Barksdale boasted to Ormeus’ officials and workers… that he had bought and sold Ormeus Coin to raise its value to $1 and that he would continue to do so.
He made good on his promise with the help of his sister.
Defendants and persons, they controlled at Ormeus Global purchased and sold Ormeus Coin directly from and to each other in the days leading up to the roadshow in Hong Kong, using accounts they controlled at Cryptopia to pump up the price.
On November 19, 2017, the day of the roadshow, the price of Ormeus Coin peaked at $5.30.
Ormeus Global sold $5.7 million worth of membership packages during the week of the roadshow, more than quadruple the sales in any previous week, thanks to these efforts and the misleading information presented about Ormeus Global’s $250 million mining deal.
In 2018, ORME wash trading was used again, this time in advance of various Ormeus Global events conducted around Europe.
Ormeus Cash (OMC) and Ormeus Ecosystem would be added to the Ormeus Global Ponzi scam over time (ECO).
In our 2018 IQ Chain assessment, BehindMLM discussed OMC’s launch.
Ormeus Ecosystem was the final manifestation of Ormeus Global. It was mentioned in a recent KIWISmart review by BehindMLM.
Former Ormeus Global executives formed KIWISmart, a clone Ponzi scam.
According to the SEC, the Barksdales solicited $124 million from approximately 20,000 Ormeus Global investors between 2017 and 2021.
In addition to the money received through the Ponzi scam;
Defendants have exploited millions of dollars in investor funds for personal gain, including vacation and real estate purchases.
The Securities and Exchange Commission (SEC) has filed a complaint alleging three breaches of the Securities and Exchange Act.
The SEC is also seeking a permanent injunction, as well as disgorgement, prejudgment interest, and a civil penalty against the Barksdales.
As we continue to investigate the matter, we will provide updates.
Update 9 March 2022: The Ormeus Global lawsuit from the Securities and Exchange Commission is now available on Pacer.
Other than the first complaint, there are no significant entries at the time of this update.