c;-Robert A. CohenValerie A. SzczepanikJorge G. TenreiroDaphna A. WaxmanDavid H. TutorSECURITIES AND EXCHANGE COMMISSIOINew York Regional Office200 Vesey Street, Suite 400New York, New York 10281-1022212 336-9145 TenreiroEmail TenreiroJsec.govUNITED STATES DISTRICT COURTEASTERN DISTRICT OF NEW YORKSECURITIES AND EXCHANGE COMMISSION,201f iCL7DEC-I PH |32Plaintiff,- against -PLEXCORPSa/k/a and d/b/a PLEXCOIN and SIDEPAY.CA,DOMINIC LACROIX andSABRINA PARADIS-ROYER,Defendants,r, 1 1 r1 rnull1 . \ ICTi . S i V .null \ i t17 Civ. ECF CaseIRCOMPLAINTIZARRY, CH..LEVY, M.J.Plaintiff Securities and Exchange Commission the Commission, for its complaintagainst Defendants PlexCorps a/k/a and d/b/a/ PlexCoin and Sidepay.Ca PlexCorps,Dominic Lacroix Lacroix, and Sabrina Paradis-Royer Paradis-Royer collectivelyDefendants alleges as followsSUMMARY1. This is an emergency action to stop Lacroix, a recidivist securities law violator inCanada, and his partner Paradis-Royer, from further misappropriating investor funds illegallyraised through the fraudulent and unregistered offer and sale of securities called PlexCoin orCase 117-cv-07007-DLI-RML Document 1 Filed 12/01/17 Page 1 of 35 PageID 1 PlexCoin Tokens in a putported Initial Coin Offering. From August 2017 through thepresent, Defendants have obtained investor fundsnullpurportedly 15 million from thousands ofinvestors, including those throughout the United States and in this Districtnullhrough materiallyfalse and misleading statements made by Lacroix individually and through entities Lacroixcontrols, including by promising investors returns of 1,354 in under 29 days. Lacroix andParadis-Royer misappropriated investor funds and engaged in other deceptive acts relating toinvestments in the PlexCoin Token, despite having both been enjoined by a Quebec tribunalfrom engaging in the very conduct that is the subject of this action.2. The ICO for the PlexCoin Tokens was an illegal offering of securities becausethere was no registration statement filed or in effect during its offer and sale, and no applicablemption from registration. The PlexCoin ICO was a general solicitation made usingstatements posted on the Internet and distributed throughout the world, including in the UnitedStates, and the securities were offered to the general public and have been sold to a large numberof investors, including many in the United States and in this District.3. The stated purpose of the PlexCoin ICO was to obtain tokenized currency sothat investors could Take control of [THEIR] money Investors in the PlexCoin ICO werepromised returns stemming from i the appreciation in value of the PlexCoin Token throughinvestments PlexCorps would make with the proceeds of the PlexCoin ICO and based on themanagerial efforts of PlexCorps team of supposed experts; ii the distribution to investors ofprofits from the PlexCorps enterprise; and iii the appreciation in value of the PlexCoin Tokensbased on efforts of PlexCorps market maintenance team, which included listing the token ondigital asset exchanges. The PlexCoin Token currently trades under the symbol PXN.Case 117-cv-07007-DLI-RML Document 1 Filed 12/01/17 Page 2 of 35 PageID 2 4. Lacroix and PlexCorps enticed potential investors to purchase PlexCoin Tokensearly on during the ICO, with promises that if all 400 million PlexCoin Tokens for sale weresold, the early investors would reap outlandish rewards of 1,354 in 29 days or less thesupposed period of the PlexCoin ICO, and by comparing the supposed returns to those in otherICOs or investments in cryptocurrenciesnulleturns as high as 88,000.5. In connection with the PlexCoin ICO, PlexCorps and Lacroix made the followingfalse and misleading statements, among others, for which Lacroix was responsible a that thePlexCorps team consisted of a growing cadre of experts stationed around the world and with aprincipal place of business in Singapore; b that the identity of PlexCorps cutives had to bekept hidden to avoid poaching by competitors and for privacy concerns; c that the proceeds ofthe PlexCoin ICO would be used to develop other PlexCorps products; and d that investorscould expect enormous and real returns on PlexCoin Token investments.6. Contrary to these false representations, and as Lacroix knew or recklesslydisregarded, PlexCorps and the PlexCoin Token are a scam because a there is no PlexCorpsteam, other than a handful of Lacroixs employees in Quebec working on the project, and nogroup of experts working across the globe; b the reason that PlexCorps did not disclose theidentity of its principal cutivenullacroixnullas because Lacroix was a known recidivistsecurities law violator in Canada; c the proceeds from the PlexCoin ICO were not destined forbusiness development but instead were intended to fund Lacroix and Paradis-Royers expensesincluding home decor projects; and d there was no reasonable basis to project returns oninvestment in Defendants scam.7. Lacroix and PlexCorps made and/or controlled the dissemination of the foregoingmisstatements and omissions in various postings on the Internet and on social media, includingCase 117-cv-07007-DLI-RML Document 1 Filed 12/01/17 Page 3 of 35 PageID 3 in a whitepaper issued by PlexCorps in connection with the offer and sale of securities duringthe PlexCoin ICO, and on webpages and Facebook accounts registered in their name, all ofwhich were accessible to United States investors via the Internet during the relevant periods.8. The funds fraudulently raised during the PlexCoin ICO have been channeledthrough various fiat currency accounts belonging to Defendants as well through cryptocurrencyaddresses under Defendants control on various blockchains. The fiat currency accountsinclude online payment services accounts in the United States that Defendants opened directlyor indirectly in the name of PlexCorps or its business alter egos, PlexCoin and Sidepay.Ca.Paradis-Royer herself opened and directed the disbursement of funds from some of theseaccounts, fully aware of or recklessly disregarding the dealings of her partner Lacroix.9. To skirt the registration requirements of the federal securities laws, Lacroix hasattempted to refashion the PlexCoin Tokens as a cryptocurrency and likened them to Bitcoin.In reality, PlexCoin Tokens are securities within the meaning of the U.S. federal securities laws.10. The illegal PlexCoin ICO has occurred despite Lacroix being the subject ofprevious orders by the Quebec Financial Markets Administrative Tribunal the QuebecTribunal enjoining him from future violations of the Quebec Securities Act, and despite havingpled guilty before a Quebec court of securities fraud.11. The foregoing illegal offering also occurred despite the Quebec Tribunal issuingan injunction in July of 2017 specifically directing Lacroix, PlexCorps, and certain companiesunder Lacroixs control, from engaging in the unregistered offering of PlexCoin Tokens, anddespite that same tribunal similarly enjoining Defendant Paradis-Royer on September 21, 2017.12. Rather than abide by the orders of the Quebec Tribunal and a contempt orderentered against Lacroix in the Quebec Superior Court, Defendants have been openly floutingCase 117-cv-07007-DLI-RML Document 1 Filed 12/01/17 Page 4 of 35 PageID 4 those orders and continue to sell and tout purchases of PlexCoin Tokens. At most, a Facebookpage related to PlexCorps indirectly acknowledged the Quebec Tribunals injunctions, obtainedby Quebecs Autorite Des Marches Financiers Financial Markets Authority or QAMF, byoffering for sale a t-shirt with a picture of a man making an offensive gesture at the name andlogo of the QAMF.13. Throughout the relevant period, tens of thousands of investors, including over1,500 transactions with investors in the United States and many in this District, have purchasedapproximately 81 million PlexCoin Tokens for approximately 15,000,000. Of those amounts,approximately 810,000 is currently held in three accounts to which Lacroix and his associateswill soon gain access. Defendants have misappropriated or attempted to misappropriate at least200,000 of these amounts on extravagant personal expenditures. Other amounts are believed tocurrently reside on Bitcoin or other blockchain addresses or wallets that Defendants control.VIOLATIONS14. By engaging in the conduct set forth in this Complaint, Paradis-Royer andPlexCorps engaged in and are engaged in ongoing securities fraud in violation of Section 17aof the Securities Act of 1933 Securities Act [15 U.S.C. null77qa], of Section 10b of theSecurities Exchange Act of 1934 the Exchange Act [15 U.S.C. null78jb], and Rule lOb-5thereunder [17 C.F.R. null240.10b-5]; and Lacroix and PlexCorps engaged in and are engaging inthe unlawful sale and offer to sell securities in violation of Sections 5a and 5c of theSecurities Act [15 U.S.C. null 77ea, 77ec]. In addition, Lacroix aided and abetted PlexCorpsviolations of Sections 5a, 5c, and 17a of the Securities Act, and of Section 10b of theExchange Act and Rule 1 Ob-5 thereunder.Case 117-cv-07007-DLI-RML Document 1 Filed 12/01/17 Page 5 of 35 PageID 5 15. By engaging in the conduct set forth in this Complaint, Paradis-Royer engaged inand is engaged in ongoing securities fraud in violation of Sections 17a1 and 17a3 of theSecurities Act [15 U.S.C. null 77qal, a3], and of Section 10b of the Exchange Act [15U.S.C. null78jb], and Rule 10b-5a and 10b-5c thereunder [17 C.F.R, null240.10b-5a, 5c],and has aided and abetted PlexCorps and Lacroixs violations of Section 17a1 and 17a3of the Securities Act and Section 10b of the Exchange Act.16. Unless the Defendants are permanently restrained and enjoined, they willcontinue to engage in the acts, practices, and courses of business set forth in this Complaint andin acts, practices, and courses of business of similar type and object.NATURE OF THE PROCEEDING AND RELIEF SOUGHT17. The Commission brings this action pursuant to the authority conferred upon it bySection 20 of the Securities Act [15 U.S.C. null77tb] and Sections 21d1 d5 of theExchange Act [15 U.S.C. null 78udl d5].18. The Commission seeks, as immediate relief 1 a temporary restraining order anda preliminary injunction against Defendants prohibiting them from future violations of Section17a of the Securities Act [15 U.S.C. null77qa], Section 10b of the Exchange Act [15 U.S.C.null78jb], and Rule lOb-5 thereunder [17 C.F.R. null240.10b-5], and prohibiting Lacroix andPlexCorps from participating in any offerings of unregistered securities or otherwise violatingSections 5a and 5c of the Securities Act [15 U.S.C. null 77ea, 77ec]; and 2 an order afreezing Defendants assets; b permitting the Commission to conduct expedited discovery; cprohibiting Defendants from destroying or altering documents; d requiring Defendants to returnto the registry of the Court any assets they have moved from U.S.-based accounts outside of theUnited States; and e requiring Defendants to provide verified accountings of investor proceeds.Case 117-cv-07007-DLI-RML Document 1 Filed 12/01/17 Page 6 of 35 PageID 6 19. The Commission also seeks a final judgment a permanently enjoining theDefendants from engaging in acts, practices and courses of business alleged herein; b orderingDefendants to disgorge their ill-gotten gains and to pay prejudgment interest thereon; cprohibiting Defendant Lacroix, pursuant to Section 20e of the Securities Act [15 U.S.C.null77te] and Section 21d2 of the Exchange Act [15 U.S.C. null78ud2], from acting as anofficer or director of any public company; d prohibiting Defendants Lacroix and Paradis-Royer, pursuant to Section 21d5 of the Exchange Act [15 U.S.C. null78ud5], fromparticipating in an offering of digital securities; and e imposing civil money penalties onDefendants pursuant to Section 20d of the Securities Act [15 U.S.C null77td] and Section21d3 of the Exchange Act [15 U.S.C. null78ud3].JURISDICTION AND VENUE20. This Court has jurisdiction over this action pursuant to 28 U.S.C. null1331, Sections20b, 20d and 22 of the Securities Act [15 U.S.C. null 77tb, 77td, and 77v] and Sections21d, 21e, and 27 of the Exchange Act [15 U.S.C. null 78ud, 78ue, and 78aa]. Defendants,directly or indirectly, have made use of the means or instruments of transportation orcommunication in, and the means or instrumentalities of, interstate commerce, or of the mails, inconnection with the transactions, acts, practices, and courses of business alleged herein.21. Venue is proper in the Eastem District of New York pursuant to Section 27 of theExchange Act [15 U.S.C. null78aa]. Among other things. Defendants false and misleadingstatements and fraudulent schemes were made to the public at large in this District, and severalof Defendants victims reside in this District.Case 117-cv-07007-DLI-RML Document 1 Filed 12/01/17 Page 7 of 35 PageID 7 DEFENDANTS22. PlexCorps is an unincorporated entity whose activities are directed by DefendantLacroix. On its website, http//. PlexCorps purports to be a group of fortypeople ... all independent throughout the world and oriented towards the same goal To increaseaccessibility to cryptoservices. From at least June 2017 through the present, PlexCorps hasmarketed, offered, and sold investors PlexCoin, which PlexCorps describes as the nextcryptocurrency. PlexCorps has also done and is doing business under the names PlexCoin andSidepay.Ca.23. Lacroix, age 35, resides in Quebec, Canada. Since at least 2011, Lacroix hasbeen the subject of numerous proceedings relating to fraudulent securities activities in Canada.24. Paradis-Royer, age 26, resides in Quebec, Canada. Paradis-Royer resides at thesame address as Lacroix and is believed to be his romantic partner. Paradis-Royer is the subjectof a Canadian court proceeding enjoining her from participating in some of the activitiesdescribed herein.RELATED INDIVIDUALS AND ENTITIES25. DL Innov, Inc. DL Innov is a corporation organized under the laws ofQuebec, Canada, in 2012, with a stated principal place of business in Quebec, Canada. Lacroixis the majority shareholder and President, Treasurer, and Secretary of DL Innov.26. Gestio, Inc. Gestio is a corporation organized under the laws of Quebec,Canada, in 2013, and with a stated principal place of business in Quebec, Canada. DL Innov isGestios principal shareholder and Lacroix is Gestios President, Treasurer, and Secretary.Case 117-cv-07007-DLI-RML Document 1 Filed 12/01/17 Page 8 of 35 PageID 8 BACKGROUND ON DIGITAL TOKENS OR COINS27. An ICQ is a fundraising event in which an entity offers participants a uniquecoin or tok