SEC Charges 2 With Fraudulent Water-Backed Token Sale

The U.S. Securities and Exchange Commission charged a former Texas pastor and his wife for allegedly defrauding hundreds of investors through an alkaline water-backed cryptocurrency, TeshuaCoin.

Larry Donnell and Shuwana Leonard were charged Friday with defrauding investors by allegedly stealing nearly $500,000 in the sale of bogus stock certificates and claiming an alkaline water-backed cryptocurrency and a non-existent bitcoin mining operation.

The Leonards are accused of specifically targeting the African-American community in this alleged scheme. Their companies, Teshua Business Group and Teshuater, are also named as defendants.

The Leonards allegedly attempted to sell phony stock in their alkaline water bottle company, Teshuater, which they said would yield “short-term investment returns of up to 3,000 percent” according to the complaint. This raised $291,044.07.

Larry Leonard is also accused of shilling Teshuater’s “fully functioning cryptocurrency,” TeshuaCoin. 

The complaint says he compared TeshuaCoin’s usability to bitcoin (BTC) and touted its “unique” attribute – it was backed by Teshuater’s bottled alkaline water. The SEC alleges TeshuaCoin was not actually backed by Teshuater. Leonard allegedly raised $170,395.20 out of his target $20 million through this scheme.

Leonard allegedly stole an additional $25,544.96 from investors in Teshuater’s non-existent bitcoin mine. The SEC said he failed to disclose the speculative nature of bitcoin mining and never actually invested the stolen funds in the mine.

Along the way, the couple is said to have stolen $486,984.28 from 500 total investors.