U.S. v. Daniel Schatt and Joseph Podulka, 24-CR-00243 WHA and U.S. v. James Alexander, 24-CR-00242 WHA

As alleged in the May 1, 2024 Indictments, defendants Daniel Schatt and Joseph Podulka, James Alexander and others engaged in a scheme, plan, and artifice to defraud, among others, Cred’s customers and investors as to a material matter, and to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises, by making materially false and misleading statements, and failing to disclose material facts with a duty to disclose.   The objectives of the scheme to defraud were, among other objectives, to cause Cred customers and investors to provide their fiat and digital currencies to Cred for its use by falsely representing (a) that Cred “only” engaged in “collateralized or guaranteed lending” when the bulk of its loans were secured by no more than a promise to repay; (b) that all of Cred’s crypto positions were “hedged” and that it implemented and maintained an “all weather approach” to investment to protect against market volatility, where Cred had no hedging strategy in place after March 16, 2020; (c) that following the “flash crash” that occurred on or about March 12, 2020 when, due to concerns about Covid-19, Bitcoin and cryptocurrency prices plummeted, Cred was solvent and had generated “a positive net income between April 30, 2020 and September 1, 2020,” despite internal liquidity analyses which revealed an overall deficit in the company that grew to in excess of $40 million by October 1, 2020; and (d) that Cred provided “comprehensive insurance” that assured that “[i]f the worst happens and Cred loses customer funds,” customers would have “certainty that they will be made whole,” despite knowing that the insurance policies provided little to no relief for any loss of customer funds.

The defendants were charged in two Indictments filed on May 1, 2024. Case Nos: 3:24-CR-00243 WHA and 24-CR-00242 WHA.

Court Documents

• Schatt and Podulka Indictment
• Alexander Indictment

Court Events

Press Release

• Former CEO, CFO, And CCO Of Cred LLC Charged With Alleged Multi-Million-Dollar Cryptocurrency-Related Wire Fraud Conspiracy

Resources

• NDCA VW Brochure
• CA Victims of Corporate Fraud

Contact Information

For questions regarding the prosecution of this case please contact the U.S. Attorney’s Victim-Witness Unit at USACAN.CREDLLC@usdoj.gov.