Two Men Sue Over Alleged Blockchain Investment Scam

News | July 8, 2024 By:

On Monday, June 24, 2024, Domenick A. Peronti and Philip H. Gardner filed a complaint in the Superior Court of the State of Delaware against Michael D. Queen, Jeffrey V. Palmer, Zenith Enterprises LLC, and Palmerosa Properties LLC.

According to the complaint, in July 2021 Queen contacted Peronti about an “exciting business opportunity” related to blockchain technology. Queen claimed there was a lucrative chance to invest in this emerging field. He sent Peronti a Memorandum of Understanding and persuaded him to wire $30,000 on July 6th.

A week later, Gardner was also recruited into the investment opportunity. He transferred $50,000 to Queen on July 14th. In the following months, Peronti wired an additional $20,000 to Queen on August 24th and another $25,000 to Palmer for a “personal loan” on September 16th. They were promised sizable returns within a matter of weeks.

However, over a year later, they had not received any profits or return of their principal. In July 2023, Queen admitted the whole scheme was a “scam” and not a legitimate blockchain or cryptocurrency investment. Palmer also acknowledged it was a “house of cards” that had no real business activity.

The complaint accuses the defendants of breach of contract for failing to invest the funds as promised and breaching the implied covenant of good faith and fair dealing. Queens and Palmers actions are alleged to have been done in bad faith without disclosing the fraudulent nature of the venture.

Peronti and Gardner also allege they were unjustly enriched by the $125,000 taken from them. Finally, they bring a claim of fraud and misrepresentation, stating the defendants knew all along it was a scam but intentionally misled the plaintiffs to part with their money.

The plaintiffs are seeking over $1 million in damages, which would constitute ten times the total amount invested.

Please contact BlockTribune for access to a copy of this filing.