A New Jersey woman pled guilty to fraud charges for her role in fronting a US$25-million scheme that was allegedly masterminded by disgraced former Canadian hedge fund manager Boaz Manor.
In early 2020, U.S. authorities charged Edith Pardo alongside Manor for allegedly duping investors to invest in a company founded by Manor, CG Blockchain Inc. (CGB), that purportedly sold a blockchain-based auditing tool for hedge funds. The U.S. Securities and Exchange Commission also brought civil charges against the pair.
Today, U.S. attorney for New Jersey Philip Sellinger announced that Pardo pled guilty to an indictment that charged her with one count of conspiring to commit wire fraud, three counts of wire fraud, and one count of securities fraud before a U.S. district court judge. She is to be sentenced on Aug. 1.
According to the indictment, “the goal of the conspiracy was for Manor and Pardo to enrich themselves by engaging in a fraudulent scheme to solicit investment in CGB by making material misrepresentations and omissions concerning their personal and professional backgrounds, their roles at CGB, CGB’s business relationships with other individuals and companies, and the use and functionality of CGB’s products.”
Specifically, U.S. authorities alleged, “Pardo acted as the face of the entities and, with Manor, told prospective investors that Pardo was independently wealthy and provided millions of dollars in seed money, when in fact, she was neither wealthy nor an investor.”
Manor and Pardo also allegedly falsely claimed that Pardo owned CGB; that Manor, using a false identity, was a consultant; and that hedge funds were paying millions of dollars to use CGB’s product, ComplianceGuard.
“In reality, the entities had no real executives, collected no fees, and ComplianceGuard was barely distributed or used,” authorities alleged.
Manor is currently a fugitive, the U.S. attorney’s office said. The charges against him have not been proven and he is presumed to be innocent.
In 2011, Manor was sentenced to four years in prison after pleading guilty to charges stemming from misconduct at his Toronto-based hedge fund, Portus Alternative Asset Management Inc. In 2012, he was banned and ordered to disgorge $8.8 million in a settlement with the Ontario Securities Commission.