The Us Securities and Exchange Commission, or SEC, has recently accused a couple from Texas of defrauding $500,000 from various investors. They allegedly did so through a water-backed token sale, quite possibly standing as one of the first water-backed crypto scams out there.

Big Goals Of Stealing $20 Million

The announcement came on Friday, where Shuwana Leonard and Larry Donnel collectively duped more than 500 individual investors by selling bogus stock certificates, as well as digital tokens. These tokens were claimed to be linked by their alkaline water-backed company, as well as a bitcoin mining operation that never existed, to begin with.

Donnell is a former pastor, and, along with his wife, targeted minority African American communities when it came to this scheme. Initially, the two attempted to raise $20 million through the sale of fraudulent digital tokens, showing that they don’t lack ambition.

The Age-Old False Promise

Two other companies were named alongside the Texan couple, namely Teshua Business Group and Teshuater. All four of these parties are now defendants within this lawsuit.

Within this scam, investors were trapped into an investment, initially promising a short-term return of up to 3,000%, something that would make anyone raise their eyebrows.

Promising Crypto Backed By Water

As the allegation from the SEC states, the couple is charged with putting the funds into the speculative crypto options market as they got the investment funds. According to the SEC statement, Donnell deceived prospective investors when it came to the TeshuaCoin and its usability within the crypto industry. Furthermore, Donnell claimed that the TeshuaCoins it provided was backed through tangible assets, namely bottled water that Teshuater had sold.

The SEC accused Larry Leonard, acting on behalf of Teshuater and individually, of peddling investments that claimed to be short-term, high yield investments into a Bitcoin mining program. As it stands now, the SEC has concluded that the mining program in question never existed in the first place.

Going All Out

As is expected, the SEC claims that these individuals used the funds raised to cover personal expenses, and are predictably accused of violating the anti-fraud and registration provisions of the Securities Act.

The SEC is going all out with this one, with the watchdog seeking disgorgement, the prejudgement interest on this, permanent injunctive relief, as well as civil penalties. On top of this, the SEC plans on mandating any and all ancillary relief that the Court gives them.