U.S. authorities have charged notorious lobbyist Jack Abramoff and the CEO of a fledgling crypto company for allegedly misleading investors.

The U.S. Securities and Exchange Commission (SEC) has charged the Nevada-based company, NAC Foundation, its CEO, Marcus Andrade, and Abramoff in connection with an allegedly fraudulent, unregistered initial coin offering (ICO).

The SEC alleged that at least US$5.6 million was raised from more than 2,400 investors by selling tokens that could be converted to a digital asset that claimed to be “a new and improved version of bitcoin,” known as AML BitCoin.

“NAC and its CEO portrayed AML BitCoin as superior to the original bitcoin, with anti-money laundering, anti-terrorism, and theft-resistant technology built into the coin,” the SEC said.

Yet, the regulator said that these features didn’t exist and that the digital asset was actually in a very early stage of development.

Additionally, regulators alleged investors were told that government agencies were negotiating to use the new asset, and a Super Bowl ad was being bought to generate interest in the offering.

The SEC alleged that, “as part of NAC’s deceptive marketing strategy,” an ad featuring North Korean dictator Kim Jong-Un was produced. The SEC also alleged that press were paid “to falsely claim that the ad was rejected” as “too political,” when in fact NAC never had the money to buy ad time during the Super Bowl.

Regulators also said that Abramoff allegedly arranged for NAC to pay for “purportedly independent articles about AML BitCoin that included many of the misleading statements.”

“We allege that these defendants repeatedly misled investors into funding non-existent technology, falsely claiming that the technology would make digital asset transactions more secure,” said Kristina Littman, chief of the SEC enforcement division’s cyber unit.

The U.S. Attorney’s Office for the Northern District of California brought parallel criminal charges accusing Andrade of wire fraud, and Abramoff of conspiracy to commit wire fraud and lobbying disclosure violations.

Abramoff settled with the SEC, agreeing to permanent industry bans and to disgorge the $50,000 in commissions he received, plus prejudgment interest. Any civil penalties against him will be determined by the court. The settlement is subject to court approval.

In 2010, Abramoff was released after serving four years of a six-year prison sentence in connection with a political lobbying and bribery scandal.

The SEC is seeking permanent bans, disgorgement and civil penalties against NAC and Andrade. The allegations against them have not been proven.

Andrade was arrested in Texas and released on bond, pending his initial federal court appearance in California on July 1.

The U.S. attorney’s office said that Abramoff is seeking to make a plea under a plea agreement, but a hearing has yet to be scheduled.