The Securities and Exchange Commission has filed charges against Arline Woodbury, 70, and Joyce Holverson, 76, alleging their promotion of the fraudulent 'Mike G Deal,' also known as CoinDeal. The SEC claims the pair solicited millions from investors, including church members, while making false statements and misusing funds.
CoinDeal was a fraudulent investment scheme created by Neil Suresh Chandran. Michael Glaspie served as the public face of the scam, overseeing new investor recruitment. The SEC has identified Woodbury and Holverson as top promoters for this operation.
Glaspie introduced Woodbury to CoinDeal. Woodbury then recruited Holverson, who subsequently created an investor group called Empowerment Project. The SEC alleges Woodbury and Holverson raised millions of dollars, transferring these funds upstream to Glaspie. They vouched for Glaspie's credibility without basis. They also ignored many warning signs about CoinDeal's legitimacy. Furthermore, they did not disclose their personal use of investor funds.
Of the $3 million Woodbury and Holverson solicited for the Mike G Deal, they kept at least $360,000. Woodbury enriched herself by misappropriating at least $190,000 for personal use. This included approximately $36,000 for travel and about $60,000 for a friend's college tuition. Holverson misappropriated at least $170,000 for personal use, most of which went to save her house from foreclosure.
The Empowerment Project focused its recruitment efforts on church members. Woodbury hosted at least one teleconference in 2020 for over ten potential investors affiliated with a church. During this call, Woodbury vouched for Glaspie and the deal's legitimacy. She presented "astronomical" payout amounts. She also shared her bank account information. Multiple new investors joined CoinDeal after this teleconference.
Woodbury and Holverson also defrauded their own recruits by secretly reducing promised payouts. Holverson routinely modified Glaspie's written updates before sharing them with Empowerment Project members. She removed the payout figures Glaspie offered. This allowed her to set final payout amounts and keep a larger share of any realized profit. Woodbury sometimes changed Glaspie's payout terms to her benefit before relaying his latest update to Holverson.
In one extreme instance, a $25 million return pitched by Glaspie was reduced to $15 million by Woodbury. Holverson then further cut it to just $2 million.
Investors questioned whether the Mike G Deal constituted an unregistered securities offering. Holverson responded with a denial. She stated, "The legal world was my home for over 30 years. I taught law classes as part of my court reporting college teaching career, and my husband was an attorney in the Chicago area for over 35 years. I’m well aware of legal implications in anything that I’m involved in. At no time was he (Glaspie) presenting this as buying stock or securities. We were presented with an involvement structured as a 'collateralized personal loan with 7% payback in 3 years if this deal falls through in several written notices to us."
The SEC's charges indicate that the legal definition of a securities offering does not depend on the promoters' chosen terminology. Woodbury and Holverson are accused of intentionally, knowingly, or recklessly committing securities fraud. They also offered and sold unregistered securities.
The majority of CoinDeal investors have not recovered their principal investments. No investors received any promised profits on their investments. Neil Chandran, the scheme's creator, was arrested in June 2022. This occurred months after the last public update from "Joyce." Michael Glaspie, the public face of the scam, pleaded guilty in February 2023. His sentencing is scheduled for October 2, 2023.
Other civil proceedings are ongoing against different defendants. Entry of defaults was recorded on August 1 for Neil Chandran, Garry Davidson, Linda Knott, AEO Publishing INC., Banner Co-Op INC., and BannsersGO LLC. Motions for default judgment from the SEC are currently pending. Summary judgments are expected against Michael Glaspie and his wife, Amy Mossel, pending Glaspie's October sentencing.
The SEC seeks a permanent injunction against Woodbury and Holverson. It also seeks disgorgement of their ill-gotten gains and civil penalties. The Empowerment Project's website, empowermentproject.me, remains online as of publication, displaying a last update from March 14, 2022, signed by "Joyce."