[Politech] Lawsuit over "gold backed" Internet currency alleges it was a scam [priv]

From: Declan McCullagh (declan@private)
Date: Tue Feb 08 2005 - 21:43:20 PST


http://news.com.com/2100-1030_3-5553141.html

Lawsuit alleges 'online currency' scam
Published: January 27, 2005, 8:47 AM PST
By Declan McCullagh

A lawsuit claiming that a "gold backed" Internet currency scheme bilked
investors out of more than $250 million can proceed against a bank
implicated in it, a federal judge has ruled.

At the height of its popularity, the OSGold currency boasted more than
60,000 accounts created by people drawn to promises of "high yield"
investments that would provide guaranteed monthly returns of 30 percent
to 45 percent.

But around July 2002, the eve of the maturity date for the investment
program, the company that offered the accounts suddenly ceased payouts.
David Reed, who had founded the company called One Groupe International,
eventually was discovered to have relocated from the United States to
Cancun, Mexico.

[...]
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