Internet, Quebec Superior Court, Rulings
Leave a comment

Suspected PlexCoin founders agree to pay nearly US$7 million

Dominic Lacroix and Sabrina Paradis-Royer lived the good life, while it lasted. He leased a $140,000 luxurious Mercedes Benz and bought a T-Rex, a three-wheeled sports car manufactured by a now bankrupt Canadian company. He purchased a $2.52 million home in a chic neighborhood in Quebec City, and then poured nearly half a million dollars in renovations. And he amassed a healthy fortune, hovering around US$3.3 million, not counting 1,677 bitcoins and other virtual currencies, in the span of a couple of months.

For the longest time, the Quebec City businessman with a shady past was making a mockery of the justice system. He even had the temerity to launch a website that recounts his “legal hell,” asserting that he is the victim of “unfair” actions by authorities.

Lacroix is suspected by Quebec’s financial watchdog and the U.S. Securities and Exchange Commission to be behind PlexCorps, a controversial cryptocurrency start-up accused of fraudulently selling millions of dollars’ worth of digital assets to thousands of investors swayed by the promise of farfetched financial returns of 1,354 per cent in 29 days or less.

He has been before the courts and administrative tribunals 27 times over the past two years over the PlexCoin scam. His offices have been raided as has his home. He was ordered countless times to stop soliciting investors. He was ordered to reveal passwords in a USB stick to help authorities recoup the monies. He was ordered to hand over the bitcoins in his possession.

Lacroix virtually ignored all of the court orders.

But now, the game is up.

The Quebec City couple allegedly behind a controversial cryptocurrency start-up accused of fraudulently selling up to US$8.3 million of tokens to thousands of investors have capitulated.

Without admitting or denying the allegations, Dominic Lacroix and Sabrina Paradis-Royer have over the past two months agreed to relinquish the entire amounts raised from PlexCoin investors frozen by American and Quebec financial watchdogs.

U.S. District Court Judge for the Eastern District of New York Carol Bagley Amon approved in early October a settlement reached between the SEC and the couple in mid-August. Lacroix and Paradis-Royer agreed to pay US$4.56 million plus nearly US$350,000 in interest, and a civil penalty of US$1million each. They also have to transfer assets frozen by the SEC.

A “fair fund” will be established with the monies for distribution to victims. The final judgment “orders that Defendants not oppose any by the SEC to enforce or collect the final judgment against any assets belonging to Defendants, including assets frozen by orders of Canadian tribunals with respect to this matter.”

As part of the final judgment, the couple have also been barred from offering digital securities while Lacroix has been barred from acting as an officer or director of a publicly traded entity.

A similar arrangement was reached with the Quebec financial regulator, the Autorité des marchés financiers (AMF). On July 24, 2019, Lacroix and Paradis-Royer agreed – again, without any admission – to reimburse “substantially all the amounts” covered by freeze orders issued by the Financial Markets Administrative Tribunal.

His legal woes are far from over.

He was found guilty of contempt of court on three charges in mid-July 2019 by Quebec Superior Court Justice Daniel Dumais. Lacroix is “concealing things, is not being upfront, and cares little about the truth,” found Justice Dumais in Autorité des marchés financiers c. Lacroix, 2019 QCCS 2995.

Quebec Court of Appeal Justice Guy Gagnon turned down Lacroix’s appeal on September 24, 2019.

“The evidence in this case was particularly overwhelming, and allowed the judge to conclude that the plaintiff had the mens rea relating to the contempt of charges against him, especially if we remember that his testimony was not believed,” said Justice Gagnon in Lacroix c. Autorité des marchés financiers, 2019 QCCA 1595.

Lacroix is now awaiting his sentence.

Leave a Reply

Your email address will not be published. Required fields are marked *