THE Securities and Exchange Commission (SEC) filed a complaint against Lottery.com, Inc. (Lottery.com) and former senior officials for alleged violations of financial fraud regulations.
Those charged include Lawrence Anthony DiMatteo, former CEO of Lottery.com, and former company executives Matthew Clemenson and Ryan Dickinson.
Another person highlighted by the SEC investigation is Vadim Komissarov, CEO of a special purpose acquisition company (SPAC), Trident Acquisitions Corp.
SEC cracks down on Lottery.com
THE SEC case was brought in the U.S. District Court for the Southern District of New York, and the regulator issued a brief missive describing the allegations.
According to the complaint, Komissarov allegedly “planned and executed a revenue fraud” with DiMatteo, Clemenson and Dickinson that allegedly violated Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 14(a) of the Exchange Act of 1934, as well as related SEC rules.
Customer data was at the heart of the scam accusations and involved what the regulator calls “useless customer data” which was then passed across a number of multi-million dollar transactions.
The initial fraud complaint points to a “revenue scam in which Lottery allegedly received $9 million for worthless customer data, counted it as revenue, and then used the $9 million to overpay two Mexican companies and thereby return the $9 million to its source.”
The second alleged revenue scam involved “a $30 million fake sale of advertising credits and, following the merger, the making of two additional fake sales totaling more than $35 million,” the court filing states.
The $9 million and $35 million transactions, according to the SEC, were handled by international companies and had no commercial or legitimate value before and after Trident Acquisitions Corp stepped in to finalize the merger agreement.
Accusations brought against former Lottery executives
DiMatteo, Clemenson and Dickinson were formally charged with aiding and abetting Lottery.com’s reporting and control violations that resulted in harm to the company’s value, misrepresentation to investors and resulted in irreparable damage to the company.
All three were also charged with falsifying and altering financial records for personal gain under SEC Rule 13(b)(5).
Clemenson and Dickinson consented to the SEC’s proposed judgments, without admitting or denying the allegations, agreeing to permanent injunctions, civil penalties, and officer and director bans, subject to court approval.
The Komissarov and DiMatteo cases remain ongoing. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, civil penalties, and officer and director bans, with no trial date set yet.
Featured Image: Lottery.com/SEGG Media
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