Two Individuals Charged With Non-Fungible Token “Rug Pull” And Laundering Proceeds Through The Solana And Ethereum Blockchains
Tampa, Florida – U.S. District Judge Mary S. Scriven today sentenced Richard Buffington (49, Clearwater) to 46 months in federal prison for committing wire fraud. The court also ordered Buffington to forfeit more than $1.2 million, which is traceable to the proceeds of the offense, and to pay more than $1.2 million in restitution to the victims of his fraud scheme.
Buffington had pleaded guilty on April 30, 2019.
According to court documents, from at least January 2013 through August 29, 2018, Buffington defrauded approximately 28 investors, from Florida and across the United States, out of more than $1.2 million by selling unregistered, non-exempt securities in the form of preferred shares. He made false and fraudulent representations to victim-investors about the need for funding for Green Street Equities (“GSE”). Buffington, GSE’s listed Chairman and President, pitched GSE as a company focused on investing in “green companies” (i.e., environmentally friendly projects). Buffington’s misrepresentations to investors included that: (1) GSE would go public soon after the investors’ stock purchase, and (2) that GSE would use investor money to acquire ownership interests in various companies in the “green energy” sector. Based on Buffington’s misrepresentations, victim-investors sent funds believing that that Buffington would use such money to fund GSE and its investments or acquisitions. Investors accepted Buffington’s misrepresentations about GSE because prior to 2013, he had successfully raised funds for a company that had gone public and from which investors had profited.
Buffington also made fraudulent representations to “green sector” companies, which he included on GSE’s website and in its Private Placement Memoranda. Some of those companies appear to have been paper companies; others were legitimate companies towards which Buffington had promised any GSE-raised investor funding would be directed to fund their respective “green sector” projects.
In the end, although Buffington marketed GSE as a company making meaningful investments or acquisitions in “green companies,” neither GSE nor Buffington ever made any such investments or acquisitions. Instead, Buffington used any monies that he raised, including money wired by an undercover agent, for his personal benefit, which included drinking, gambling, and drug use.
This case was investigated by the Federal Bureau of Investigation and the Florida Office of Financial Regulation. It was prosecuted by Assistant United States Attorney Kaitlin R. O’Donnell.