Ethereum Insider Files Lawsuit Against FBI Co-Conspirators

7 months ago 37

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Steven Nerayoff, a former advisor to Ethereum, has initiated a lawsuit against Michael Hlady, also known as Michael Peters, and Marianna Shooshani in the Supreme Court of New York, Nassau County in his quest for justice. The lawsuit alleges a fraudulent scheme orchestrated to deceive Nerayoff, resulting in substantial financial loss.

According to the court documents, the plaintiff, Steven Nerayoff, accuses Hlady and Shooshani of creating a fictitious consultancy firm, North Star Ventures Corp. (“NSV”), purporting to offer specialized consulting services to Nerayoff, who is known for his contributions to the Ethereum ICO protocols and his leadership at Alchemist Group LLC, a consultancy and investment firm for blockchain companies.

The suit, which delves deep into allegations of fraud and deceit, details an elaborate scheme that allegedly conned Nerayoff out of over three-quarters of a million dollars through a non-existent consulting service. Via X, Nerayoff stated:

I am pleased to announce that justice is finally being served against Michael Hlady, a government agent / provocateur who collaborated with FBI agents and others to unjustly prosecute me for nearly four years. The FBI gave credibility to Hlady, […] Despite being aware of his fraudulent activities unrelated to me, the government deliberately shielded him from prosecution in 2018.

Nerayoff revealed on X (formerly Twitter) that he has already initiated legal actions against FBI agents, StormX, and now Hlady. He also hinted that his legal pursuits are far from over, indicating more developments are likely to follow. “And make no mistake, we will not stop until we have uncovered every bit of corruption, including within agencies like the SEC, involved in #EthGate. Expect more to come, and know that I am committed to holding all accountable for their actions,” he stated.

Ethereum Insider Exposes What Happened

Nerayoff has filed claims against Hlady and Shooshani for creating and promoting a fictitious entity named North Star Ventures Corp. (“NSV”). According to the complaint, in December 2017, Shooshani introduced Nerayoff to her then-boyfriend, Hlady, who posed as a former government agent with claimed affiliations to the NSA, FBI, and CIA. The defendants asserted that Hlady’s consulting company, NSV, consisted of a team of similar ex-government operatives who could provide indispensable security and business vetting services to Nerayoff’s blockchain ventures.

The legal document details that Shooshani and Hlady, under the guise of NSV, induced Nerayoff to enter into a consulting agreement which promised extensive services from individuals purportedly possessing over 125 years of combined experience in fields crucial to corporate and government operations. “The agreement also claimed that ‘The North Star Venture team has been involved in providing consultation for corporations and deals with combined values exceeding $1 Billion US all done behind the scenes in the utmost of confidentiality,'” the complaint quotes.

From January to October 2018, Nerayoff paid several hundred thousand dollars to NSV based on invoices and requests presented by Hlady and Shooshani. These payments were meant to cover consulting fees, as well as supposed travel and miscellaneous expenses related to the services NSV was contracted to provide. The lawsuit details a list of transactions that include significant sums wired or transferred under the belief they were legitimate business expenses—illustrative of the depth of the alleged fraud.

The turning point in this saga came in November 2018, when Nerayoff discovered that not only did NSV not exist, but Hlady was also a convicted felon, recently released from prison after defrauding a Catholic school. The complaint highlights this shocking revelation with excerpts from Nerayoff’s communications to Shooshani expressing his dismay and sense of betrayal. Upon uncovering the truth, Nerayoff confronted Shooshani with messages that read: “This is the worst mistake of my life. He’s a two-bit con artist. How could you unleash this criminal on me!?”

Legal Proceedings And Claims

In response to these allegations, Nerayoff’s legal team has presented a multi-faceted legal strategy seeking recovery of the funds paid to Hlady and Shooshani, along with additional damages. The lawsuit articulates several causes of action including fraudulent inducement and common law fraud, underpinning the severity of the defendants’ actions.

“Plaintiff only agreed to enter into the January 14, 2018 agreement with NSV upon the express representations from defendants Hlady and Shooshani that defendant Hlady was a former decorated federal agent,” the complaint asserts, detailing the reliance of the former Ethereum advisor placed on these misrepresentations.

Previously, the former Ethereum advisor had made public how the US Department of Justice, US Securities and Exchange Commission and FBI sought to hold him accountable over 3.5 years in a lawsuit for a crime they fabricated just to gain leverage over other players in the crypto industry.

At press time, Ethereum (ETH) traded at $3,027.