A judge's gavel

Patrick McDonnell, owner of alleged investment firm Cabbage Tech, was charged with wire fraud, according to a press release from the Department of Justice.

As per the press release, McDonnell, also known as “Jason Flack”, was charged with nine counts of wire fraud and was arrested on March 26, in relation to an alleged plan to defraud cryptocurrency investors. Richard P. Donoghue, a United States Attorney for the Eastern District of New York, said in the press release:

“As alleged, the defendant defrauded investors by making false promises and sending them fraudulent balance statements, hiding the fact that he was stealing their money for his personal use. The defendant’s fraud ends now, he will be held responsible for his criminal conduct.”


McDonnell portrayed himself as an experienced crypto trader between November 2014 and January 2018, offering customers to buy and trade cryptocurrency on their behalf, and promising to provide them with trading advice. He reportedly used his company Cabbage Tech Corp, also known as Coin Drop Markets, to ask for investments through social media, such as Facebook and Twitter.

According to the statement, neither McDonnell nor Cabbage Tech provided investment services, instead clients received falsified balance records, stating that their investments were profitable. When customers requested to withdraw their funds, McDonnell first made excuses for delaying their repayment, and then stopped responding altogether.

As per the report, investors were duped out of $194,000 in cash, 4.41 Bitcoin (worth $17,551), 206 Litecoin ($12,215), 620 Ethereum Classic ($2,914) and 1,342,634 Verge (9,035) in total. If found guilty, McDonnell faces a maximum of 20 years in prison.

The Commodity Futures Trading Commission won a court order to permanently ban McDonnell back in August of last year, when a judge ruled that he was operating a “boiler room” to defraud investors, and ordered him to pay $290,429 in restitution and $871,287 in penalties. McDonnell was not represented by a lawyer at the time, citing his inability to pay for the counsel.