Renwick Haddow

Alleged Bitcoin Bilker Arrested in Morocco

Crime, News | July 27, 2017 By:

Businessman Renwick Haddow has suffered his second arrest for bitcoin-related fraud. This time, the police in Tangiers, Morocco have nabbed him.

Haddow, a UK citizen who lived in New York City, is alleged to have bilked investors using a purported bitcoin platform and a chain of co-working spaces located in former bars and restaurants. He was previously arrested earlier this month under the authority of the US Securities and Exchange Commission, which filed fraud charges against him.

It is unclear whether this second arrest is because he was a fugitive to those charges, or was done at the request of a second law authority.

 The SEC alleges that Haddow created a broker-dealer and did not register the firm with the SEC, as required under the federal securities laws. Haddow allegedly used sales representatives to cold-call potential investors and sell securities in his Bitcoin Store Inc. and Bar Works Inc.

The SEC’s original complaint said offering materials presented to investors in both companies touted the backgrounds of senior executives who do not appear to exist. The materials also misrepresented other key facts about both companies’ operations.  Haddow allegedly diverted more than 80 percent of the in-funds raised by the broker-dealer for the Bitcoin Store, and sent more than $4 million from the Bar Works bank accounts to one or more accounts in Mauritius and $1 million to one or more accounts in Morocco.

“As alleged in our complaint, Haddow created two trendy companies and misled investors into believing that highly-qualified executives were leading them to quick profitability,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office. “In reality, Haddow controlled the companies from behind the scenes and they were far from profitable.”

The SEC alleges that materials provided to Bitcoin Store investors claimed it was “an easy-to-use and secure way of holding and trading bitcoin” and had generated several million dollars in gross sales.  The SEC alleges that Bitcoin Store has never had any operations, nor generated the gross sales it touted.  In 2015, for example, Bitcoin Store’s bank accounts allegedly received less than $250,000 in incoming transfers, none of which appear to reflect revenue from customers.  According to the SEC’s complaint, the corporate address used for Bitcoin Store was Haddow’s residential address, minus the apartment number.

According to the SEC’s complaint, Bar Works claimed to bring “real vibrancy to the flexible working scene by adding full-service workspaces to former bar and restaurant premises in central city locations.”  Bar Works primarily sold leases coupled with sub-leases that together functioned like investment notes.  The company also allegedly sold leases for more workspaces than actually existed in at least two locations.  Among the alleged false claims made to investors, who invested more than $37 million in the Bar Works scheme, were that a location was profitable within months of opening and that Bar Works had engaged an auditor.