Staten Island Man Pleads Guilty to Defrauding Investors in Virtual Currency
For Immediate Release
U.S. Attorney's Office, Eastern District of New York
Defendant Solicited Investments on Social Media, Then Stole the Money for Himself
Earlier today, Patrick McDonnell, also known as “Jason Flack,” pleaded guilty at the federal courthouse in Brooklyn to wire fraud in connection with a scheme to defraud investors in virtual currency. When sentenced, McDonnell faces up to 20 years in prison as well as forfeiture and restitution to his victims. The plea took place before United States District Judge Nicholas G. Garaufis.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the guilty plea.
“McDonnell has admitted that he used old-fashioned deception to defraud investors seeking to trade 21st century currencies,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will continue to prosecute those who swindle the investing public to the full extent of the law.” Mr. Donoghue expressed his grateful appreciation to the United States Commodity Futures Trading Commission (CFTC) for its significant cooperation and assistance in this case.
Between approximately November 2014 and January 2018, McDonnell portrayed himself as an experienced trader in virtual currency, promising investors he would provide trading advice and purchase and trade virtual currency on their behalf. Beginning in approximately May 2016, McDonnell made similar representations through his Staten Island-based company, CabbageTech, Corp., also known as Coin Drop Markets. However, neither McDonnell nor CabbageTech provided investment services. Instead, McDonnell sent investors false balance statements purportedly showing that their investments had been profitable, and stole their money for his personal use. McDonnell defrauded at least 10 victims of at least $194,000 in U.S. currency, 4.41 Bitcoin, 206 Litecoin, 620 Ethereum Classic and 1,342,634 Verge.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Hiral D. Mehta is in charge of the prosecution.
PATRICK MCDONNELL (also known as “Jason Flack”)
Staten Island, New York
E.D.N.Y. Docket No. 19-CR-148 (NGG)
United States Attorney’s Office
Updated April 18, 2023
Securities, Commodities, & Investment Fraud