Shopin ICO Founder Faces 15 Years In Prison Over $600K Securities Fraud Scheme

Crime, News | August 30, 2018 By:

Eran Eyal, the CEO and Founder of Shopin which raised over $42.5 million in an initial coin offering (ICO) earlier this year, has been indicted on multiple counts of grand larceny and fraud.

The New York State Attorney General has charged Eyal with allegedly defrauding $600,000 from investors when he was the CEO of Springleap, a global crowdsourcing company that offered marketing, digital media, and platform design services to clients. According to details in the AG’s release, between 2014 and 2015, Eyal allegedly attracted investors to Springleap through a series of false representations about the company’s management team, advisory board, creative professionals, and client base.

“Springleap allegedly advertised that it had a prestigious management team – including Chief Technology Officers (CTO) with impressive biographies – when, in reality, the company did not have a CTO,” the release said. “While the names of the fabricated CTOs in the investment materials belonged to real individuals, Eyal allegedly inflated their credentials to state that they were previously CTOs at major companies before joining Springleap in order to claim that high-profile executives were part of Springleap’s management team. Similarly, Eyal allegedly misrepresented to the investors the existence of an Advisory Board consisting of well-known successful and respected businessmen – though no such Board ever met.”

In addition to defrauding $600,000 from US investors, the Attorney General’s investigation has identified additional Springleap investors located in Australia, South Africa, and the United Kingdom that invested a total of over $1.3 million in Springleap.

“As we allege, this massive securities fraud scheme bilked investors out of hundreds of thousands of dollars,” said Attorney General Barbara Underwood. “Defrauding New Yorkers through false representations and fabrications about a business will not be tolerated by my office – and we’ll continue to do what it takes to root out and prosecute securities fraud.”

Eyal faces three counts of Grand Larceny in the Second Degree, one count of Grand Larceny in the Third Degree, one count of Unlawful Duplication of Computer Related Material in the First Degree, one count of Criminal Possession of Computer Related Material), one count of Scheme to Defraud in the First Degree, and four counts of Securities Fraud under the Martin Act. If convicted of the top count charged, Eyal faces up to five to 15 years in prison.