Case examiner says Cred platform hired escaped prisoner as CFO

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It is believed that the bankrupt cryptocurrency lending platform Cred Inc accidentally appointed a prison refugee as its chief financial officer.

A report filed on March 8 by auditor Robert Stark of Brown Rudnick LLP alleges that Cred James Alexander’s former CFO has been identified by the UK authorities as a financial refugee who was sentenced to more than three years in prison in December 2007 . Stark said:

“At the time of his incarceration, this facility was on hiatus. Mr Alexander has been identified as a refugee by the British government.”

Stark was appointed by Judge John Dorsey in December to investigate allegations made by Cred’s clients that the company lost $ 66 million to fraud and incompetence in less than two years.

The report found that Cred’s accounting and compliance practices are “non-systematic, chaotic and in some cases non-existent”.

“When Cred filed for bankruptcy, it had not done a full financial reconciliation of accounts in nearly a year,” he said, adding:

“Cred apparently excelled in his marketing goals; but his flaws in the most basic business functions pointed to his ultimate demise.”

Alexander has been at the center of Cred’s bankruptcy proceedings since filing in November. The firm’s lawyers accused him of wanting to take over the subsidiary Cred Capital. They accuse Alexander of transferring $ 4.3 million of the company’s crypto to accounts under his control and losing another $ 11.5 million in digital assets to fraud.

The defendant filed to dismiss Cred Capital’s filing for bankruptcy, claiming he was its director and the only person who could approve the filing. The application was rejected earlier this month.

Last month, Alexander’s lawyers pulled out of the case, claiming the defendant wrongly owned crypto assets that he had repeatedly directed to contact authorities.