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mike novogratz crypto industry

The Tale of Crypto Talking Head Mike Novogratz

mike novogratz galaxy digital

For those not aware, Michael Novogratz, the famed crypto industry ‘pioneer’ and crypto evangelist is a former Goldman Sachs ‘global macro wunderkind’ who then did a stint at asset management firm Fortress Investments, which cratered during his watch, turned into a bitcoin evangelist and became the “bitcoin billionaire” brains behind “crypto investment firm” Galaxy Digital. He has a long history of making big bets with other people’s money. Unfortunately, his gambles have often turned into snake-eyes when the dice stopped rolling.

But that’s OK, his personal investment accounts weren’t exposed to the slaughter that was wreaked on Fortess’s institutional investors when his misguided bets on Brazil currency back in 2014 turned into sour coffee grinds. The losses on bets he made or oversaw devastated Fortess, yet the firm managed to extricate its stakeholders through an IPO, enabling Fortress executives to cash out with tens of millions of dollars each.  

“At Fortress troubles first surfaced in the macro funds run by Novogratz, a man known for his glitzy lifestyle, complete with a Tribeca duplex once owned by Robert De Niro and a flamboyant wardrobe featuring diamond-studded belts and cowboy boots.”

He quit Fortress to start a firm to invest his own wealth. He kept investigating bitcoin and other cryptocurrencies, becoming more serious about the investments.

Over time, Mr. Novogratz came to see them as a “really cool new technology” that was likely better capable of storing value amid rising inflation than alternatives, he said at a recent conference. Soon, he was a true convert, buying $10 million of bitcoin and another cryptocurrency called ether partly because he sensed a lack of trust in global currencies, he said.  See https://www.wsj.com/articles/mike-novogratzs-crypto-comeback-faces-a-trial-by-fire-11654315211

mike novogratz luna

During the past five years, Novogratz has become the poster child for crypto and bitcoin, “talking his book” at every opportunity, and helping to lead thousands of blind mice investors to pump up the price of bitcoin and to plow hundreds of millions of dollars into his firm Galaxy Digital (OTCMKTS: BRPHF) so that he could “invest for them”—while reaping fees that would make most people’s eyes pop out.

Throughout the unprecedented bubble building in crypto “currencies”, Novogratz and many other evangelists/promoters including Jack Dorsey, Elon Musk, Michael Saylor, Disney film star Brock Pierce, the Winklevoss twins, investing genius and former Donald Trump PR trumpeter Anthony Scaramucci, Internet Billionaire and Game Show Host Mark Cuban among so many others, have proclaimed that Bitcoin, Ether, Tether, and many others represent “a store of value”, “a hedge against inflation”, “a safe haven when traditional financial assets (stocks, bonds, sovereign currencies) suffer from global economic and geopolitical turmoil.” All the crypto evangelists, and in particular, famed hedge fund manager Ray Dalio, proclaim that Bitcoin and other so-called currencies represent the “digital version of gold“; which many global investors believe to be a useful hedging tool that should be part of every portfolio.

So let’s take a measure. Since January of 2022, the US equities markets (as measured by S&P 500 index, DJIA, as well as markets in many other advanced countries have suffered generational losses in share prices. The declines of 25% in value in equity prices are thanks to an inflationary spiral caused by supply-chain challenges brought on by Covid 19, monetary policies that created historic government hand-outs in an effort to stem the impact of Covid-19, along with a global geopolitical crisis thanks to Russia invading Ukraine, and a sober reaction to over-inflated enterprise valuations and hysterical stock market speculation. The combination of these events has almost no comparison when looking back five decades.

Yes, stock markets are cyclical and suffer bear markets and crashes; some short-lived, others longer-lasting. The global benchmark S&P 500 is off 24% from its Dec 2021 all-time high; the German Stock Market Index has shaved 20% from its high, and the Shanghai Stock Index is off 10%. Gold, the universal hedge against both geopolitical crisis and inflation, is up a scant 1% YTD. Bitcoin, the proclaimed “hedge against all of the above-noted crisis events” has plunged 69% from its stratospheric all-time high.

As of June 18 2022, Bitcoin has lost more than 60% of its “value” on a YTD basis.

Among other investments, Mike Novogratz, via Galaxy, was a big backer of Terra Luna–a platform based on Tether, the digital asset platform that was co-founded by another crypto genius, former child-actor Brock Pierce. He’s a self-proclaimed billionaire too–and many refer to him as the “Prince of Puerto Rico” in view of the real estate he has acquired and the influence he has over the swarm of crypto ‘entrepreneurs’ who have taken over much of that island.

Like Novogratz, Pierce is an active investor in a broad swath of crypto initiatives and start-ups, one of which is a phony funny, yet apparently, a fraudulent firm calling itself Seaquake.io, for which Pierce is identified as an advisor. It is also a criminal enterprise that MarketsMuse has profiled for the past two years, and its founder Andrew Katz, is now purportedly a fugitive from justice.

brock pierce investments
https://www.marketsmuse.com/founder-ceo-of-crypto-trading-firm-seaquake-io-andrew-katz-convicted-in-new-york-now-a-fugitive/

Let’s not forget that investments made by Galaxy included Novogratz and his partners receiving ‘tokens’ issued by the companies they invested in that were priced at pennies. Those tokens were no different than penny-priced ‘warrants’ given to underwriters of traditional IPO offerings.

After pumping the news of those investments, those tokens turned into ‘real money’ for the promoters—who cashed out into the frenzy and bought mansions and boats; reminiscent of the antics made famous by the infamous  Jordan Belfort’s firm Stratton Oakmont—the underwriter for the 1993 IPO of shoe company started by Steve Madden.

[Belfort and Madden were then convicted of securities fraud and both went to jail. Flash forward to 2021, Jordan Belfort repurposed himself into a crypto evangelist and is minting millions by ‘advising’ people on how and what crypto deals to invest in.]

February 2021– Novogratz Sees Bitcoin at $100k 

Bloomberg Technology- Michael Novogratz, a long time proponent of cryptocurrencies through his firm Galaxy Digital Holdings Ltd., said Bitcoin and other digital coins have become “an institutional asset class” and banks are “frantically” trying to get in on the action.

https://www.bloomberg.com/news/videos/2021-03-04/mike-novogratz-says-bitcoin-will-hit-100k-by-end-of-year-video

https://coinfomania.com/novogratz-says-crypto-is-closer-to-bottom/

Mar 31 2022 In Midst of Crypto Sell-Off, Novogratz Says “I’m More Constructive about the market than I was previously..” Michael Novogratz, the billionaire cryptocurrency investor who leads Galaxy Digital Holdings Ltd., said that while he still expects a volatile year, he has become more “constructive” about digital-asset markets than he was earlier. 

“It wouldn’t surprise me to see crypto significantly higher by the end of the year,” Novogratz said during Galaxy’s earnings conference call on Thursday. “Given the adoption cycle I’m seeing, given the way markets trade, and how I see new people wanting to get in, the innovation we’re seeing in web3 and the metaverse space, I’ve gotten more constructive than I was at the beginning of the year.” 

No surprise then that soon thereafter, while talking up bitcoin investing and predicting meteoric price rises, he was selling stakes that his firm Galaxy Digital held in various “cryptocurrencies”.  Nice.  

May 9 2022 CEO Michael Novogratz highlighted weakness across crypto and equity markets during Galaxy’s earnings call Monday, though said he isn’t “panicked by any stretch.” He added that his recent investor meetings point to growing adoption, and noted that “crypto as a tech play” is gaining momentum.

“Volatility will continue,” according to Mike Novogratz, although he said he expects bitcoin to hold around the $30,000 level and ether to stick around the $2,000 level.

Source: https://www.coindesk.com/business/2022/05/09/galaxy-digital-records-q1-loss-of-1117m-amid-crypto-losses/

June 5 2022 Novogratz Says “Bitcoin Won’t Break $20k” speaking at the Morgan Stanley Financials Conference, the billionaire investor, known for always sharing his opinions on events surrounding the asset class, showcased his bullish stance on cryptocurrencies. 

Novogratz said he is confident that bitcoin (BTC) and Ether (ETH) would not crash below $20,000 and $1,000, respectively.

The crypto proponent stated that the two leading cryptocurrencies would hold strongly at those levels while noting that the benchmark of S&P 500 (.SPX) has dropped more than 20% from its record high earlier in January, and the stock market might plummet further to 15% to 20%.

June 15 2022 “Crypto Crisis Evokes 1998 Hedge Fund Crash that Crippled Market”

That’s what Mike Novogratz, CEO of top crypto investment firm Galaxy Digital, told CNBC Wednesday (June 15), referring to the 1998 collapse of a large and highly leveraged hedge fund that sent shockwaves so large through the economy that the U.S. government was forced to intervene and broker a $3.6 billion bailout.

June 18 2022  BTC sold down to $18,500.00

Our Editorial Team begs to ask the question, “Aside from making mediocre investment managers become multi-millionaires and billionaires, along with similar exponential gains in net worth for tens of hundreds (and upwards of many thousands of “innovators” and “disruptors”), what product or service, or what actual efficiency has been created for any industry that would justify the outsized gains in net worth afforded to a relatively few?” Contact Us to provide a rebuttal.

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Founder / CEO of “Crypto Trading Firm Seaquake.io” Andrew Katz Convicted in New York; Now a Fugitive

FEBRUARY 15 2022: ANDREW ROSS KATZ AKA ROSS KATZ WAS CONVICTED OF ASSAULT CHARGE IN NYC on Feb 7; FLEES AND FOREGOES $200K BAIL BOND; FUGITIVE WARRANT FOR ARREST ISSUED IN NEW YORK; KATZ NOW BELIEVED TO BE SENDING DEATH THREATS TO WITNESSES; CONSIDERED TO BE ARMED AND DANGEROUS

In a continuation of a bizarre story that MarketsMuse has been monitoring for more than two years, Andrew Ross Katz, the founder, and CEO of so-called digital asset/crypto trading firm Seaquake.io is now a fugitive after failing to appear for a series of court dates in New York Criminal Court and since being convicted on Feb 7 2020 of assault charges that were first brought in November 2020.

Court: New York Criminal Court
Case # CR-020482-20NY
(PUBLIC RECORDS EXPUNGED)

Arrest Date & Time: November 5 2020 09:30 Arrest #:M20629660 
andrew-katz-seaquake-felony-assault-charge-new-yhork
New York Criminal Court File CR-020482-20NY

According to confidential sources, the ADA prosecuting the case had been warned at the early stages of the criminal proceedings of Katz’s extensive criminal background in multiple states, and that the ADA had been lobbied to request the court to deny bail, as the defendant should have been considered a flight risk. Katz’s criminal arrest record extends over many years in cities that include his hometown of Arvada, CO, Los Angeles, New York, and Miami. Katz’s most recent arrest apparently took place in late 2021 in Miami, during the same time a cryptocurrency convention was being held in that town.

As to the charge of Aggravated Harassment, according to multiple sources, this particular charge is consistent with a behavior pattern that Katz has perpetrated repeatedly over the past years against various people (unrelated to the current charges). No less than four individuals who have had ‘run-ins’ with Katz, including former landlords, relatives, and aggrieved investors have each independently contacted MarketMuse to share respective incidences in which Katz has tormented them with physical threats via voice message and text messages sent by ‘burner phones’, as well as defamatory messages that Katz has posted on social media platforms, all in effort to intimidate these individuals in retribution for legitimate complaints they had made against him in various jurisdictions.

Editors note: Fugitive Katz’s ‘aberrant behavior’ seems to extend back to his adolescence, according to public court filings. While in his teens, he was dispatched by his parents to a Utah-based ‘educational facility operated by “World Wide Association of Specialty Programs” that, according to public records, “is in the business of serving desperate parents of troubled youths and specializes in improving the students’ aberrant social behavior..” Per link above, fugitive Katz and Alyson Katz (Andrew Katz’s mother) were members of a class-action lawsuit brought against “WWSPS”. (That suit was dismissed in 2011).

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Crypo Firm Co-Founder Andrew Ross Katz aka Ross Katz aka Stark Katz

According to informed sources, soon after his disappearance last week, Katz has purportedly commenced a series of death threats against a separate individual (and immediate family members), who is a victim of financial fraud that Katz and partner, Matthew J. Krueger of San Francisco are alleged to have committed back in 2019. It is believed the [purported] death threats that came from Katz (“purportedly, yet with high probability”, according to law enforcement officers familiar with the matter), are part and parcel to a lengthy history of intimidation tactics that Katz has exacted in retribution on those have filed charges against him.

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Seaquake’s Matthew Krueger (l), Fugitive Andrew R. Katz (r)

To the amazement of those interviewed and familiar with the apparent criminal activities of Katz, Krueger, and associated entities, the individuals’ profiles, and respective current Seaquake.io executive roles remain displayed and promoted on LinkedIn (e.g. Andrew Katz, Founder & CEOMatthew Krueger, “Partner & CFO” and the company’s website, which continues to publish “updates” that suggest the firm offers a range of “crypto trading and fintech applications and services to the cryptocurrency industry”. That website also displays a number of crypto industry investment firms that have purportedly made investments in Seaquake.

Most recent updates to that website suggest that funds managed by Crypto Industry Pioneer Brock Pierce‘s Percival Ventures, along with those from Blockchain Founders Fund, whose senior principal is Aly Madhavji, are investors in Seaquake. Both Pierce (a 2020 presidential candidate) and Madhavji are displayed as Advisors to the company on the Seaquake website. Sources have told MarketsMuse that Madhavji has denied having any connections to Seaquake, yet neither of these individuals or members of their firms has responded to outreaches by MarketsMuse for them to confirm or deny the information displayed on the Seaquake.io website.

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Founder of Crypto Trading Firm “Seaquake” Andrew Katz Returns to NY Criminal Court to face Felony Assault Charge; UPDATE: CONVICTED AND FLEES: NOW WANTED BY NYPD

andrew-katz-seaquake-felony
Crypto Firm Co-Founder Andrew Ross Katz aka Ross Katz aka Stark Katz

Andrew Katz aka Ross Katz aka Stark Katz, the co-founder of so-called digital asset infrastructure and crypto-currency trading firm Seaquake.io, who along with his partner Matthew J. Krueger of San Francisco are facing investor fraud charges, is now slated to return to New York Criminal Court July 14 to answer to one count of felony assault, one count of grand larceny and one count of aggravated harassment.

Court: New York Criminal Court
Case # CR-020482-20NY (PUBLIC RECORDS REMOVED UPON CONVICTION)

Arrest Date & Time: November 5 2020 09:30 Arrest #:M20629660 

Officer Agency:NYPD 

Defendant Katz, Andrew R Katz, whose bail was set at $200,000 had him posting $100,000 in cash, which sources believe to have emanated from funds that Katz and his partner Matthew J. Krueger of San Francisco hoodwinked from a Florida-based family office 18 months ago.

Defendant Katz, who continues to promote himself on LinkedIn and on the firm’s website as co-founder of the so-called digital asset infrastructure company “Seaquake.io” was arrested this past November in New York and has been granted numerous delays to answer to the latest charges. If Katz is found guilty, or if he decides to plead guilty and save the court system the aggravation of having to deal with him, he could be sentenced to a minimum of 2 years in prison.

NEWS ALERT: FEBRUARY 15 2022: ANDREW ROSS KATZ AKA ROSS KATZ CONVICTED OF ASSAULT CHARGE IN NYC; FLEES AND FOREGOES $200K BAIL BOND; FUGITIVE WARRANT FOR ARREST ISSUED IN NEW YORK; KATZ NOW BELIEVED TO BE SENDING DEATH THREATS TO WITNESSES; CONSIDERED TO BE ARMED AND DANGEROUS.

REWARD OFFERED BY NYPD

In a continuation of a bizarre story that MarketsMuse has been monitoring for more than two years, Andrew Ross Katz, the founder, and CEO of so-called digital asset/crypto trading firm Seaquake.io is now a fugitive after failing to appear for a series of court dates in New York Criminal Court and since being convicted of assault charges brought in November 2020. For reasons that would not be explained by the Manhattan District Attorney’s Office, the New York Criminal Court case record was expunged from the public database at the time of the February 7 conviction.

The Manhattan DA would also not comment on allegations the ADA prosecuting the case had been warned at the early stages of the criminal proceedings of Katz’s extensive criminal background in multiple states, and that the ADA had been lobbied to request the court to deny bail, as the defendant should have been considered a flight risk. Katz’s criminal arrest record extends over many years, with arrests on an assortment of charges in cities that include his hometown of Arvada, CO, Los Angeles, New York, and Miami. Katz’s most recent arrest apparently took place in late 2021 in Miami, during the same time a cryptocurrency convention was being held in that town.

Editors note: Fugitive Katz’s ‘aberrant behavior’ seems to extend back to his adolescence, according to public court filings. While in his teens, he was dispatched by his parents to a Utah-based ‘educational facility’ operated by “World Wide Association of Specialty Programs” that, according to public records, “is in the business of serving desperate parents of troubled youths and specialized in improving the students’ aberrant social behavior..” Per link above, fugitive Katz and Alyson Katz (Andrew Katz’s mother) were members of a class-action lawsuit brought against “WWSPS”. (That suit was dismissed in 2011).

seaquake.io crypto scam-andrew katz-matthew krueger-dylan-knight
Seaquake.io principals Andrew Katz (l), Matthew Krueger (c) and CIO Dylan Knight

According to informed sources, soon after his disappearance last week, Katz has purportedly commenced a series of death threats against a separate individual (and immediate family members), who is a victim of financial fraud that Katz and partner, Matthew J. Krueger of San Francisco committed back in 2019. That victim has since assisted law enforcement in pursuit of criminal charges against the Seaquake executives, and it is believed the [purported] death threats that came from Katz (“purportedly, yet with high probability”, according to law enforcement officers familiar with the matter), are part and parcel to a lengthy history of intimidation tactics that Katz has exacted on those in retribution for filing charges against him.

To the amazement of those interviewed and familiar with the apparent criminal activities of Katz, Krueger, and associated entities, the individuals’ profiles, and respective current Seaquake.io executive roles remain displayed and promoted on LinkedIn (e.g. Andrew Katz, Founder & CEO; Matthew Krueger, “Partner & CFO” and the company’s website continues to publish “updates” that suggest “the firm offers a range of fintech applications and services to the cryptocurrency industry”.

Most recent updates to that website promote news that funds managed by Crypto Industry Pioneer Brock Pierce‘s Percival Ventures, along with those from Blockchain Founders Fund, whose senior principal is Aly Madhavji, are investors in Seaquake. Both Pierce (now referred to as the Prince of Puerto Rico, as well as being a 2020 presidential candidate) and Madhavji are displayed as Advisors to the company on the Seaquake website. Neither of these individuals or members of their firms has responded to outreaches by MarketsMuse for them to confirm or deny the information displayed on the Seaquake.io website.

NYPD TIPS Program is Offering a Reward for information that leads to the arrest of Andrew Katz. Anyone with knowledge of Katz’s whereabouts should contact the NYPD by phoning 800-577-TIPS, or via the TIPS website

As to the charge of Aggravated Harassment, according to multiple sources, this particular charge is consistent with a behavior pattern that Katz has perpetrated repeatedly over the past several years against various people (unrelated to the current charges). No less than four individuals who have had ‘run-ins’ with Katz, including former landlords, relatives, and aggrieved investors have each independently contacted MarketMuse to share respective incidences in which Katz has tormented them with physical threats via voice message and text messages sent by ‘burner phones’, as well as defamatory messages that Katz has posted on social media platforms, all in effort to intimidate these individuals in retribution for legitimate complaints they had made against him in various jurisdictions.

andrew-katz-matthew-krueger-seaquake-investor-fraudAs reported previously Katz and Krueger (pictured left) who also still promotes himself on LinkedIn and on the company’s website as Chief Financial Officer for Seaquake), have both been labeled “the Crypto Kleptos” and The Seaquake Slime Boys” by several people interviewed. Rumor is they are both facing a pending list of other criminal matters, including SBA PPP bank loan fraud. Public records indicate that Mssrs. Katz and Krueger applied for a PPP loan for Seaquake OPS LLC, a Wyoming entity that Seaquake corporate presentations have identified as one of several Seaquake companies. Seaquake OPS LLC did receive a Paycheck Protection Loan of $22,813 through Wells Fargo Bank, National Association, in May, 2020.

andrew-katz-seaquake-felony-assault-charge-new-yhork

“Crypto-Trading Firm” Founder Andrew Katz Now Faces Felony Assault Charges

Andrew Katz aka Ross Katz aka Stark Katz, the co-founder of so-called digital asset infrastructure and crypto-currency trading firm Seaquake.io, who along with his partner Matthew J. Krueger of San Francisco are facing investor fraud charges, is now slated to appear in New York Criminal Court April 30 to answer one count of felony assault, one count of grand larceny and one count of aggravated harassment. Katz, whose bail was set at $200,000 had him posting $100,000 in cash, which sources believe to have emanated from funds that Katz and his partner Matthew J. Krueger of San Francisco hoodwinked from a Florida-based family office 18 months ago.

andrew-katz-matthew-krueger-seaquake-investor-fraud
Seaquake’s Matthew Krueger (L), Fugitive Andrew Katz (R) http://www.seaquake.io)

FEB 12 2022 UPDATE: ANDREW KATZ CONVICTED OF ASSAULT CHARGES IN NEW YORK; FLEES AND FORGOES $200K BAIL; NOW A FUGITIVE WANTED BY NYPD

Reward Offered For Information Leading to Apprehension of Founder of so-called “crypto trading and digital asset infrastructure firm”. DO NOT APPROACH SUSPECT: CONTACT NYPD AT 1-800-577-TIPS, OR SUBMIT TIP TO CRIME STOPPERS WEBSITE VIA THIS LINK

The case document is via New York Court System Case CR-02020482-20NY, The victim of the assault is Katz’s now-estranged wife, Selen Katz, a Turkish immigrant who appears to make her career as an Instagram fashion model.

Felony Assualt Victim, Selen Katz,

Defendant Katz, who apparently still promotes himself on the firm’s website as co-founder of the so-called digital asset infrastructure company “Seaquake.io” was arrested this past November in New York and now faces 2nd Degree Felony Assault Charges (a class D felony), one count of Grand Larceny ( an E Felony) and one charge of aggravated harassment. If Katz is found guilty or if decides to plead guilty and save the court system the aggravation of having to deal with him, he could be sentenced to a minimum of 2 years in prison.

Katz and Krueger, who have been labeled “the Crypto Kleptos” and The Seaquake Slimeboys” by several people interviewed, are also said to be facing a pending list of other criminal matters, including SBA PPP bank loan fraud. Public records indicate that Mssrs. Katz and Krueger applied for a PPP loan for Seaquake OPS LLC, a Wyoming entity that Seaquake corporate presentations have identified as one of several Seaquake companies. Seaquake OPS LLC did receive a Paycheck Protection Loan of $22,813 through Wells Fargo Bank, National Association, in May, 2020.

Whether Katz or Krueger (or jointly) prepared the loan application when listing employees, Katz’s estranged wife was identified as the company’s Creative Director (whose employment with Seaquake, according to her LinkedIn profile, started in April of 2020. Informed sources have since indicated that Ms. Katz had no recollection of ever having created a LinkedIn account, and has stated she was never an employee of any Seaquake entity. According to police records in Los Angeles and New York, the current assault charge is the latest in a series of at least five prior domestic abuse arrests for Katz.

Manhattan District Attorney’s office would not provide details as to Katz’s current place of residence, yet he is suspected of squirming through an assortment of Airbnb rentals in Southern California while awaiting his April 30 court appearance, as well as New York City. In various documents, Katz also lists residences in Arvada Colorado (belonging to his parents Ken and Alyson Mahl Katz), and he lists addresses in California and Florida in various bank account documents obtained by court order. According to public databases, Katz has prior assault charges, along with charges of harassment, breaking and entering, and stalking throughout the past several years.

In the Florida securities and investor fraud case, in which defendants Katz and Krueger are charged with defrauding a Family Office it’s alleged that the Seaquake Slimeboys (mis) represented they were operating a start-up business and told investors that their several hundred thousand dollar investment in August 2019 “was for balance-sheet purposes only and to show pending venture investors the company did have other investors and assets on the balance sheet”. Communications sent by Katz to the investors indicated a small portion of the capital would be deployed to a proprietary “high-frequency trading” application for crypto currencies.

Alas, there were no pending VC investors, and there was no actual trading application. Katz and Krueger moved the investor funds from one bank to another, and then to a Coinbase account, and thereafter to crypto exchange Binance. It is easy to suspect that Katz and Krueger (a former PayPal employee fluent in cryptocurrency) have been enjoying the 6-fold increase in the price of bitcoin since the initial investor fraud took place.

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SBA Bailout Funds Going to Firms on FBI Watchlist

PPP and EIDL Fraud is as rampant as COVID-19. According to the front page story appearing in the New York Times April 26 edition, hundreds of millions of dollars in SBA bailout funds that were intended by the US Treasury to assist small businesses impacted by COVID-19 via the Paycheck Protection Program and EIDL Loan Program have been siphoned off by public companies, private equity-backed companies and thousands of small businesses, many of the latter don’t really exist other than in name only.

To many financial crime investigators who are fluent in the failings of US government’s effort to support businesses that have suffered from the pandemic, it is no surprise that tens of millions of dollars have gone to scamsters and fraud artists, including those who have been recently indicted or have been under investigation by federal law enforcement and federal and state regulatory agencies.

Shocking?! Nah. According to one senior investigator from The Financial Crimes Enforcement Network (FinCEN) “However well-intended, the PPP and EIDL loan programs created the perfect opportunity for serial financial fraud artists to exploit loopholes that a teenager could drive a Boeing jet through. PPP and EIDL fraud is rampant.”

In addition to the assortment of rogues that were outed in the above-referenced NYT coverage, it appears that individuals running a so-called fintech company called Seaquake.io, which claims to “specialize in digital asset infrastructure” along with “crypto currency trading applications” and profiled here and other online media outlets back in October, are back at it again.

Informed sources have indicated having direct knowledge that Seaquake.io principals Andrew Katz and Matthew Krueger, who have been cited in federal court for an assortment of investor fraud and wire fraud allegations, had recently filed SBA loan applications for as many as six different Seaquake entities, including Colorado-registered Seaquake Inc., Seaquake Manager LLC, Seaquake LP, Wyoming-based Seaquake OPS LLC, and a California entity, Seaquake Capital LP. Each of these entities list both Andrew R. Katz and Matthew Krueger as controlling officers.

And, it was revealed that Seaquake OPS LLC, the above-referenced Wyoming entity did in fact apply for and did receive a Paycheck Protection Loan of $22,813 through Wells Fargo Bank, National Association, which was approved in May, 2020.

AVEM Ventures LLC, a Colorado entity identified along with each of the above in a federal civil court action, lists Katz as the controlling officer and a Kenneth S. Katz as the registered agent. This entity is also believed to have applied for loans and grants intended for businesses that have been impaired by the COVID-19 pandemic.

There is only one problem, the company is a scam, according to a former business development executive for Seaquake, who worked for the company while he was also registered with Finra as a senior executive for San Francisco based brokerdealer US Capital Global. That former employee (his tenure lasted all of 7 months and he has since moved to the role of ” Director, Digital Wealth Solutions” for Apex Clearing Corp.” has stated “Seaquake is not a real business; the product(s) they claim to have are “nothing more than vaporware”; they have no employees drawing salaries other than Katz, (who recently added his wife Selen to the ‘payroll’, though it would appear that her full-time job is that of an Instagram influencer, along with Krueger and UK-based Dylan Knight, who is listed as the chief technology officer on corporate documents. This is all despite claims made on the company website as to having multiple employees; “a canard”, according to one source who says the “serial fabrications made by the company are advanced further by fraudulent representations made in an assortment of investor solicitation documents the company has sent to dozens of individuals and fund managers.”

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Seaquake’s Matthew Krueger (L), Andrew Katz (R)

Katz was seen in December vacationing at a resort in Cabo with his swimsuit model wife, a Turkish national whose opportunity to apply for US citizenship comes on the third anniversary of their marriage, August 2 2020. How the US Immigration and Naturalization Service (INS) or Department of Homeland Security view applicants who are married to accused money launders is only something those agencies can respond to. In early March 2020, the couple was spotted posing for photos on the beach in Southampton, New York. It is rumored that Katz is now hiding out in New York City. Neither he or his San Francisco-based partner Krueger, both accused of defrauding at least several investors, including a Florida-based family office this past August, have made themselves available for comment.

The San Francisco branch of BBVA Compass Bank, the bank of record for an assortment of Seaquake enterprises, had no comment has to whether they facilitated EIDL loan processing or payments to the Seaquake’s alleged criminal enterprise.

One can only hope that FBI and SEC efforts lead to a long-term quarantine for these individuals.

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Another Cryptocurrency Trading Scam-Former NYSE Floor Broker Charged

In a scheme that reads much like the MarketsMuse story published in October profiling so-called digital asset firm Seaquake.io, whose principals Andrew Katz and Matthew Krueger fraudently claimed to be operating a high-frequency trading system for cryptocurrencies, Michael W. Ackerman of Ohio, and a former NYSE floor broker, was charged yesterday by the US SEC, the CFTC and the US Attorney for the Southern District of New York for defrauding investors out of $33million in the course of operating cryptocurrency trading scam.

Ackerman, much like Seaquake’s Katz and Krueger, provided investors with phony documents that claimed his firm’s two entities, Q3 Trading Club and Q3 I LP, operated a HFT trading firm that developed a “proprietary trading algorithm” for trading cryptocurrencies. As it turns out, Ackerman, along with with two other defendants charged in the case, used their investors’ funds to purchase homes, cars, jewelry and other personal items. One can only guess that Katz and Krueger of Seaquake stole Ackerman’s playbook for how to defraud investors, as Ackerman apparently first advanced his scheme in 2017 and continued until 2019 according to the charges.

While Katz and Krueger have not yet been hit with criminal charges in their cryptocurrency trading scam, the Ackerman timeline would suggest that the Seaquake operators, who still maintain a company website and are purportedly still soliciting investors, can expect an early morning knock on their doors sometime soon.

The Ackerman Q3 saga has been reported by multiple outlets.

SEC’s complaint

Michael Ackerman allegedly raised $33 million in a fraudulent crypto trading scheme. Further, Ackerman and his two partners misled investors by claiming they had developed an extraordinarily profitable crypto trading algorithm. One of the partners was a doctor. (CrowdFundInsider)

According to the SEC, around 150 investors, including many in the medical fraternity, lost money in the alleged fraud. The perpetrators floated Q3 Trading Club and Q3 I LP – two entities that enabled the digital currency investment offering.

The SEC also alleged Ackerman used most of the money raised from the hapless investors to buy jewelry, cars, and to purchase and renovate a house.

Moreover, he lied to investors about the profitability of his trading, the status of the funds and their safety.

He “doctored” computer screenshots of trading accounts to give a false impression that they held as much as $310 million.

“Ackerman exploited popular interest in digital assets as a means to obtain millions of dollars for his personal use,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.

andrew katz-matthew krueger-seaquake.io fraud

Seaquake.io Fraud; So-Called Crypto Trading Firm Makes Investor Money Disappear, Founder/CEO Disappears After Conviction in New York Criminal Court

(Source: Law360.com ) Andrew R. Katz, aka Ross Katz, aka Stark Katz  an Arvada, Colorado man who is last known to reside in either of New York City or Southern California, and uses California, Colorado, Florida and New York drivers licenses while claiming to be a former FX trader for EFG Bank, and who now presents himself as co-founder of  Seaquake.io, a”digital asset infrastructure company”, along with Seaquake CFO Matthew J. Krueger of San Francisco, who claims to be a former PayPal “Finance Manager” and the former “Head of Finance” for Venmo, have both been named as Defendants in a Federal Court complaint alleging the two men advanced a systematic scheme to defraud a Florida-based investor group. Also named in the action is Dylan Knight, a UK man who is listed as a co-founder and Chief Technology Officer for the company. The Federal Court complaint cites multiple accounts of securities fraud, fraud in the inducement, and wire fraud.

THIS STORY UPDATED SEPTEMBER 2020 TO MARK THE FIRST ANNIVERSARY OF THIS EXCLUSIVE REPORT. CLICK HERE FOR THE UPDATE

FEB 2022 UPDATE: ANDREW KATZ, CEO OF ‘SEAQUAKE.IO’ CONVICTED OF ASSAULT IN NEW YORK; SKIPS $100K CASH BAIL AND NOW A FUGITIVE SOUGHT BY NEW YORK POLICE CLICK HERE FOR UPDATE

According to a Zurich-based private equity fund manager who had been repeatedly approached by Katz to invest, “All of the patented elements of old-fashioned investor fraud have been perpetrated by these Seaquake characters, casting yet another shadow of skepticism on the entire digital asset industry. It is amazing how brazen these individuals are. Based on their apparent actions, one can hope that law enforcement officials will do their jobs and prosecute these people quickly. Even if the wheels of justice spin slow, anyone in the industry should be alert to these people and be aware they have already destroyed any future professional career in any industry.”

seaquake.io crypto scam-andrew katz-matthew krueger-dylan-knight
Seaquake.io principals Andrew Katz (l), “CFO” Matthew Krueger (c), CIO Dylan Knight (r)

According to the Federal Court complaint, Katz lists former jobs at UBS Bank and EFG Capital in investor offering documents, the company’s website, as well as his Linkedin profile, despite Finra having no record of Katz being licensed by that securities industry regulator at any time, and despite EFG Capital having no record of his employment. More importantly, the court filings include a series of email communications, text messages, and group chat messages on Linkedin in which Katz and Krueger made a series of fraudulent representations that induced the investors to enter into a so-called “SAFE Agreement” with the company. Investors were of the belief the funds would be deployed to a high-frequency trading application that Seaquake principals, including so-called CTO Dylan Knight of the UK, claimed to be operating.

JANUARY 2021 UPDATE: SEAQUAKE CO-FOUNDER ANDREW KATZ CHARGED WITH FELONY ASSAULT AND GRAND LARCENY IN NEW YORK; FACES MINIMUM 2 YEAR PRISON SENTENCE

BREAKING NEWS FEB 2022 UPDATE

ANDREW KATZ, CEO OF PURPORTED CRYPTO FIRM “SEAQUAKE.IO” CONVICTED OF ASSAULT CHARGES IN NEW YORK AND FLEES, LEAVING BEHIND $100K CASH BOND; NOW A FUGITIVE SOUGHT BY NEW YORK POLICE

CLICK HERE FOR LATEST

THIS STORY UPDATED SEPTEMBER 2020 TO MARK THE FIRST ANNIVERSARY OF THIS EXCLUSIVE REPORT. CLICK HERE FOR THE UPDATE

According to the complaint, only several days after the investors executed the agreement with the company and wiring funds to a Seaquake account at Signature Bank in New York, Katz then informed the investors the high-frequency trading application was “not in fact in production and the [investor] funds would be placed into a money market account until such time as the software was ‘production ready.” Defendants Krueger and Katz also made a series of assertions as to pending institutional investors who committed to providing capital to Seaquake, all of which turned out to be false, according to the filing. According to court documents and independent background searches, it turns out that Katz has driver licenses in New York, Florida, Colorado, and California, and is also registered to vote in Florida.

UPDATE MARCH 2021: SEAQUAKE ENTITY ‘SEAQUAKE OPS LLC’, A WYOMING CORPORATE SHELL NOW SUSPECTED OF SBA LOAN FRAUD; APPLIED FOR AND RECEIVED PPP-RELATED LOAN

This latest charge adds to a pending list of other criminal matters, including a likely bank loan fraud perpetrated by Katz and Krueger in connection with Seaquake OPS LLC, a Wyoming entity that is part of the web of Seaquake companies. Recently discovered, Seaquale OPS LLC did in fact apply for and did receive a Paycheck Protection Loan of $22,813 through Wells Fargo Bank, National Association, which was approved in May, 2020. In that loan application, Selen Katz, former wife of Andrew Katz, and the victim identified in the felony assault charge is identified as an employee of Seaquake. Her title, according to a LinkedIn profile is “creative director” and her date of employment is the same month in which the PPP Loan was applied for.

Katz has a history of criminal charges, from trespassing charges in New York to domestic abuse charges in Los Angeles. This private investigator’s background report is telling. Other background searches indicate that Katz, along with his mother, Alyson Katz of Arvada, Colorado were plaintiffs in a class action law suit brought against a Utah-based school for emotionally-challenged youth, a facility that Katz was apparently sent to by his parents and attended for at least two years while he was a teenager.

If only Andrew Katz’s wife, Selen Katz, a Turkish national and Instagram Influencer who apparently works as a swimsuit model, didn’t need Katz to help her secure a Green Card. Otherwise, perhaps she’d realize that being married to a scam artist is not the path to a happy future in the U.S. More important, actions pending against Katz could raise eyebrows from US immigration authorities who will be evaluating her request for citizenship. She should hope that more recent frauds committed by her husband and his partner in connection with PPP loans don’t add fuel to the criminal investigation fire burning under their butts.

THIS STORY UPDATED SEPTEMBER 2020 TO MARK THE FIRST ANNIVERSARY OF THIS EXCLUSIVE REPORT. CLICK HERE FOR THE UPDATE

Back to the primary coverage….Once the investors realized they had been scammed and then demanded the return of the funds, Katz and Krueger took steps to dissolve “Seaquake Partners LP”, the corporate entity the investors sent their funds to, according to the corporate register agent. According to records in the filing, Defendants Katz and Krueger wrote to the investor informing “we will not communicate with your attorney and we have no obligation to provide any further information..” Concurrently, the Defendants transferred the investor funds from the company account at Signature Bank in New York to multiple, newly-created Seaquake entity accounts at a Compass Bank BBVA branch in California, near where Krueger lives. Thereafter, bank records indicate Katz and Krueger dispersed the funds to various internal company accounts, and then transferred a bulk of the investor’s funds to crypto exchange Coinbase, which they moved days later to crypto exchange and custody platform Binance.

As acknowledged by the defendants’ attorney, Yasin Daneshfar of Florida law firm Becker and Poliakoff, Katz and Krueger also moved tens of thousands of dollars to personal accounts the defendants established at Compass Bank. Attorney Daneshfar argued “the so-called “SAFE Agreement” did not preclude the defendants from dispersing the money as they saw fit.” Daneshfar further acknowledged in a recent court appearance that, in addition to the defendants enriching themselves with much of the investor’s funds, the investors’ funds have also been used by Katz and Krueger to pay the Becker law firm in their effort to defend themselves against the investors in federal court. When challenged with this use of funds by the federal court judge who pointed to the series of communications from Katz to the investors, Attorney Daneshfar was said to have responded to the judge with a smirk and a shrug of his shoulders.

While much of the information obtained in the federal court filings may seem to be the source of good fodder for a ten cent crime novel, according to one Switzerland-based venture capital executive who is focused on the digital currency space and who had also been solicited by Seaquake to serve as both an advisor and to provide investment funds, “All of the patented elements of old-fashioned investor fraud have been perpetrated by these Seaquake characters, casting yet another shadow of skepticism on the entire digital asset industry. It is amazing how brazen these individuals are. Based on their apparent actions, and whether or not they get caught by law enforcement officials, they have effectively destroyed any future professional career in any industry.”

david streltsoff-seaquakeDespite all of the shenanigans, David Streltsoff, a Senior Vice President for San Francisco broker-dealer “US Capital Global” and a former salesman for high-frequency trading firms was apparently not deterred from associating himself with Seaquake. According to his LinkedIn profile in the months of September through November 2019, Streltsoff served as “Business Development Executive” for the company, while also a registered broker-dealer for US Capital. Streltsoff’s rofile was updated at the end of November after Streltsoff was served with a federal court subpoena for information pertaining to his involvement with Seaquake. According to a former investigative journalist, now a due diligence advisor to fund managers evaluating crypto startups, Streltsoff told him “It took one too many days for me to figure out this company was peddling nothing more than vaporware, and the scam accusations against them were eye-opening, so I terminated my association with them.” Jeffrey Sweeney, the CEO of US Capital Global has not replied to inquiries.

Update: Since the litigation was filed, at least one other investor has been identified as having been scammed. That investor was apparently introduced to the company in June 2019 by a friend who was employed by Seaquake.io as “business development executive.” That friend sent the investor a so-called Safe Agreement, along with wire payment instructions to a Seaquake bank account held by a Bank of America branch in Colorado. Once that investor learned of the recent court action, the investor contacted Katz and demanded the return of the money sent to Seaquake in July. Katz replied via email stating “we have no record of having executed a Safe Agreement with you, and the former employee provided you with incorrect wire instructions, so we never received your money, and we don’t owe you anything.” When the investor provided Katz and Krueger with Bank of America correspondence that affirmed the Seaquake account information was correct and confirmation from the bank the wire payment had in fact been credited to the account Katz created, Katz ceased all further communication. That investor has since filed a criminal complaint and the former executive is said to be cooperating with law enforcement authorities. Perhaps Mr. William Bao Bean, a principal of SOSV Ventures / Chinaccelerator –which recently disclosed making an investment in “Seaquakes”, as did Jeremy Colless, Managing Partner of down-under VC “Artesian Capital” both failed to get the memo…(?)

THIS STORY UPDATED SEPTEMBER 2020 TO MARK THE FIRST ANNIVERSARY OF THIS EXCLUSIVE REPORT. CLICK HERE FOR THE UPDATE

In November, the federal court judge lifted the temporary restraining order on bank accounts controlled by Seaquake principals Katz and Krueger, and cited concerns as to whether the Florida court was the appropriate jurisdiction to litigate the action. Plaintiffs are expected to continue the litigation.

Katz was last seen in December at the Hotel Kai Tulum resort in Cabo San Lucas vacationing with his wife, who posted an assortment of photos baring ‘birthday bling’ while sipping margaritas.

THIS STORY UPDATED SEPTEMBER 2020 TO MARK THE FIRST ANNIVERSARY OF THIS EXCLUSIVE REPORT. CLICK HERE FOR THE UPDATE