i 

IN THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF TEXAS 

AUSTIN DIVISION 

________________________________________________ 

SECURITIES AND EXCHANGE COMMISSION, § 

 § 

 Plaintiff, § 

 § 

v. § 

 § 

META 1 COIN TRUST, § 

ROBERT P. DUNLAP, individually and d/b/a § Civil Action No.: 1:20-cv-273-RP 

CLEAR INTERNATIONAL TRUST, § 

NICOLE BOWDLER, and DAVID A. SCHMIDT, § 

 § 

 Defendants, § 

§ 

and § 

 § 

PRAMANA CAPITAL, INC., § 

PETER K. SHAMOUN a/k/a PETER K. SHAMOON, § 

WANDA IRONHEART TRAVERSIE-WARNER, § 

ALFRED DEWITT WARNER JR. § 

AND IRONHEART TRUST, § 

 § 

Relief Defendants. § 

________________________________________________§ 

PLAINTIFF’S MOTION FOR MONETARY REMEDIES AND FOR ENTRY OF FINAL 

JUDGMENT AS TO ALL DEFENDANTS AND WARNER RELIEF DEFENDANTS 

AND BRIEF IN SUPPORT 

Dated: September 22, 2022 Respectfully submitted, 

 /s/ Jennifer D. Reece 

 Jennifer D. Reece 

 Texas Bar No. 00796242 

 James E. Etri 

 Texas Bar No. 24002061 

 United States Securities and Exchange Commission 

 Burnett Plaza, Suite 1900 

 801 Cherry Street, Unit 18 

 Fort Worth, Texas 76102 

 Direct phone: (817) 978-6442 (JDR) 

 Fax: (817) 978-4927 

 reecej@sec.gov 

COUNSEL FOR PLAINTIFF 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 1 of 21
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TABLE OF CONTENTS 

Page 

TABLE OF AUTHORITIES ...................................................................................................... iii

I. PROCEDURAL POSTURE AND SUMMARY OF REQUESTED RELIEF .................1 

II. SUMMARY OF RELEVANT FACTS ............................................................................3 

III. ARGUMENT AND AUTHORITIES ...............................................................................8 

 A. Legal Standards ...........................................................................................................8 

 B. The Court Should Set the Amount of Disgorgement and PJI as to the 

 Defaulting Defendants and Warner Relief Defendants ..............................................9 

 1. Meta1/Dunlap .....................................................................................................10 

 2. Bowdler ...............................................................................................................11 

 2. Warner Relief Defendants ...................................................................................11

 C. The Court Should Order Schmidt to Pay Disgorgement and PJI 

 in the Amounts Requested ........................................................................................12

 

 D. The Court Should Impose Maximum Civil Penalties on the Defendants for their 

 Illegal Conduct ..........................................................................................................12 

IV. CONCLUSION ...............................................................................................................16 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 2 of 21
iii 

TABLE OF AUTHORITIES 

Cases 

Liu v. SEC 

140 S. Ct. 1936 (2020) ........................................................................................8, 9, 10, 11 

First City Fin’l Corp., 

 890 F.2d 1215 (D.C. Cir. 1989) ..........................................................................................9 

Nishimatsu Constr. Co. Ltd. v. Houston Nat’l Bank, 

 515 F.2d 1200 (5th Cir. 1975) ............................................................................................2 

SEC v. AMX, Int’l, Inc., 

 7 F.3d 71 (5th Cir.1993) .....................................................................................................8 

SEC v. Halek, 

 537 F. App’x 576 (5th Cir. 2013) .................................................................................9, 10 

SEC v. Hallam, 

 42 F.4th 316 (5th Cir. 2022) ...............................................................................................9

SEC v. Helms, et al., 

 2015 WL 5010298 (W.D. Tex. Aug. 21, 2015) ..............................................................8, 9 

SEC v. Kern, 

 425 F.3d 143 (2nd Cir. 2005) ...........................................................................................13 

SEC v. Life Partners Holdings, Inc., 

 71 F. Supp. 3d 615 (W.D. Tex. 2014) ...............................................................................13 

SEC v. MacDonald, 

 699 F.2d 47 (1st Cir. 1983) .................................................................................................9 

SEC v. Manor Nursing Ctrs., Inc., 

 458 F.2d 1082 (2nd Cir.1972) ......................................................................................8, 12 

SEC v. Rockwell Energy of Texas, LLC, No. H-09-4080, 

 2012 WL 360191 (S.D. Tex. Feb. 1, 2012) .......................................................................8 

SEC v. Seghers, 

 298 F. Appx. 319 (5th Cir. 2008) ........................................................................................9 

SEC v. Sneed, 

 2021 WL 4202171 (N.D. Tex. [Dallas] Sept. 10, 2021) ...............................................9, 12 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 3 of 21
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SEC v. United Energy Partners, Inc.,

 88 Fed. Appx. 744 (5th Cir. 2004) ....................................................................................10 

SEC v. Voight, 

 2021 WL 5181062 ....................................................................................................8, 9, 13 

SEC v. Warren, 

 534 F.3d 1368 (11th Cir. 2008) ..........................................................................................9 

Statutes and Rules 

Securities Act Section 5 ..................................................................................................................2 

Exchange Act Section 10(b) ...........................................................................................................2 

Securities Act Section 17(a) ........................................................................................................ 2 

Exchange Act Section 21(d) ...............................................................................................8, 12, 13 

Exchange Act Rule 10b-5 ................................................................................................................2 

17 C.F.R. 201.1001 .................................................................................................................12, 13 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 4 of 21
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Pursuant to the Court’s Orders dated October 5, 2020 [Doc. 101] and February 8, 2021 

[Doc. 114], Plaintiff Securities and Exchange Commission (“Plaintiff” or “Commission”) files 

this Motion for Monetary Remedies and Brief in Support, and Motion for Entry of Final 

Judgment as to: (1) Defendants Meta 1 Coin Trust (“Meta1”), Robert P. Dunlap, individually and 

d/b/a Clear International Trust (“Dunlap”), and Nicole Bowdler (“Bowdler”) (together, “the 

Defaulting Defendants”); (2) David A. Schmidt (“Schmidt”) (collectively, with the Defaulting 

Defendants “Defendants”); and (3) Relief Defendants Wanda Ironheart Traversie-Warner 

(“Traversie”), Alfred Warner (“Warner”), Ironheart Trust (“Ironheart”) (together, the “Warner 

Relief Defendants”), and respectfully shows as follows:1

I. 

PROCEDURAL POSTURE AND SUMMARY OF REQUESTED RELIEF2

On February 8, 2021, the Court granted Plaintiff’s Motion for Default Judgment 

against the Defaulting Defendants and the Warner Relief Defendants. Doc. 114. The Court 

imposed permanent injunctive relief as to the Defaulting Defendants, see id., at pp. 12-14, and 

ordered that the Defaulting Defendants “shall pay disgorgement of ill-gotten gains and 

prejudgment interest thereon, and a civil penalty[].” Id. at p. 14 (emphasis added). The Court 

further ordered that the Warner Relief Defendants “shall pay disgorgement of all funds they 

have received in connection with the Defendants’ illegal acts described in the Amended 

 

1

 In support of this motion, Plaintiff attaches as Exhibit 1, and fully incorporates herein, the Declaration of SEC 

accountant Carol Hahn (“Hahn Dec.”). 

2

 On February 3, 2021, the Court entered an Agreed Final Judgment as to Relief Defendants Pramana Capital, Inc. 

and Peter K. Shamoun, a/k/a Peter K. Shamoon (the “Shamoon Relief Defendants”), ordering them to pay, jointly 

and severally, disgorgement of $7,457,998 plus PJI in the amount of $176,152.79, for a total of $7,634,150.79. 

[Doc. 113.] Of this amount, the Commission has collected $1,519,817.79. [Hahn Dec. at ¶ 25.] 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 5 of 21
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Complaint.” Id. (emphasis added). 

As to Schmidt, on October 5, 2020, the Court entered an agreed partial judgment [Doc. 

101] imposing injunctive relief, and ordering that the Court shall determine whether monetary 

remedies are appropriate, and if so, in what amounts, given the facts alleged in the Redacted 

Amended Complaint [Doc. 63 (hereinafter “Complaint”)], which the Court must accept and 

deem true. See Doc. 101, at p. 5, ¶ V. Schmidt is precluded from arguing that he did not 

violate the federal securities laws as alleged in the Complaint. Id. 

For purposes of this motion, Schmidt has admitted the allegations in the SEC’s 

Complaint. [Doc. 100-1, at p. 4.] Likewise, because defendants have defaulted, the “wellpleaded allegations of fact” against them are admitted.3

 See Doc. 114, at pp. 4-5 (citing 

Nishimatsu Constr. Co. Ltd. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). 

Thus, in determining the appropriate monetary remedies to be imposed against the parties, the 

Court must accept as true that: (1) the Defendants committed securities fraud in violation of 

Section 10(b) of the Securities and Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 

thereunder and Section 17(a) of the Securities Act of 1933 (“Securities Act”); (2) in 

committing their fraudulent scheme, the Defendants acted with a high degree of scienter; (3) 

the Defendants offered or sold unregistered securities in violation of Sections 5(a) and 5(c) of 

the Securities Act; and (4) the Warner Relief Defendants are in possession of ill-gotten gains, 

to which they have no legitimate claim. 

Based on these violations, and on the record of this case, the Commission requests: (1) 

an order finding the Defendants and the Werner Relief Defendants liable to pay disgorgement, 

prejudgment interest (“PJI”) and/or civil penalties as requested herein; and (2) the entry of the 

 

3

 The SEC incorporates the allegations of the Complaint herein. [See Doc. 63.] 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 6 of 21
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attached proposed final judgments as to all remaining parties. 

II. 

SUMMARY OF RELEVANT FACTS 

1. From April 2018 through the present (the “relevant period”), Defendants, both 

directly and through entities they control, have raised over $15.2 million from at least 800 

investors in 40 states and eight foreign countries, through deceptive acts and materially false and 

misleading statements and omissions. [Compl., at ¶ 2; Hahn Dec. at ¶ 20 (updating the 

numbers).] For example, Defendants have falsely stated that: (a) investors were, in fact, 

purchasing asset-backed digital coins; (b) Meta1 owned $1 billion in art insured against loss by a 

surety bond, and later, that Meta1 owned $2 billion [and now $8.8 billion] in gold assets; (c) 

KPMG, one of the largest independent financial audit firms in the world, was auditing Meta1’s 

gold assets; (d) Meta1 formed its own investment bank and developed its own digital currency 

exchange; (e) the Coin is safe and risk-free and will never lose value; (f) an initial public offering 

of the Coin (“ICO”) on its own exchange was imminent; and (g) each Coin, sold for either 

$22.22 or $44.44 would in two years be worth $50,000—up to a 224,923% return—as a “very 

conservative value.” [Compl. at ¶ 2.] 

2. Defendants enticed investors with the allure of a cryptocurrency, but the securities 

offering is nothing but a vehicle to steal investors’ money. [Id. at ¶3.] In reality, as Defendants 

knew, or were severely reckless in not knowing, each of the statements listed above was, and is, 

false. There is no reasonable basis to project any investment returns—much less a 224,923% 

return—given that, as Defendants knew or were severely reckless in not knowing, victims were 

simply investing in a scam. [Id.] And although Defendants assured investors that KPMG 

verified and affirmed Meta1’s gold valuations to bolster their claims that the Coin was safe and 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 7 of 21
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risk-free, those assurances were lies. [Id.] KPMG never performed any audit services for 

Meta1, or anyone associated with Meta1 or any of the Defendants. [Id.] 

3. Despite many court orders and even an arrest warrant, Dunlap and Meta1 

continue to operate and market the investment scheme through various means, including its 

website (https://meta1coin.vision), social media, Zoom calls with investors and prospective 

investors, in-person seminars, and on an internet radio show 

(https://www.thejimpriceshow.com). [Hahn Dec. at ¶ 4.] Meta1’s current White Paper now 

claims that the Meta1 Coin is backed by $8.8 billion in gold assets (up from $2 billion claimed 

gold assets in March 2020). [Id.] By comparison, the current reported value of United States 

Treasury-owned gold held in reserve at Fort Knox is approximately $6.2 billion. See Status 

Report of Gold Reserve, available at https://fiscaldata.treasury.gov/datasets/status-reportgovernment-gold-reserve/u-s-treasury-owned-gold. Meta1 continues to falsely claim that it is 

free from U.S. government oversight. [Id.] 

4. As recently as September 12, 2022, Meta1/Dunlap sent an email blast to investors 

and prospective investors inviting them to join the Meta1 “Executive Team” at a “Meta1 

Workshop” to be held in Las Vegas on September 24, 2022. The email featured Dunlap as a 

speaker at the event, and listed the “current value” of the Meta1 Coin at $377. Dunlap originally 

“valued” the Coin at $22.22. [Id. at 5, Hahn. Ex. 1.] 

5. On June 13, 2022, Meta1 sent out an email blast advising the public that: 

Both the Crypto Market and the Stock Market are in FREE FALL, Wiping out Billions

as they go down. Meta1 coin has not gone down at all, in fact it has Increased in all of 

this chaos! 

. . . 

NOW, is the right time to jump in to META1! “See how cleverly orchestrated 

Crypto ‘financial modeling & design’ can help you secure your holdings”. 

[Id. at 32, Ex. 4, all errors and emphasis in original.] 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 8 of 21
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6. Dunlap continues to operate the Meta1 scheme through various Meta1 associates. 

From the start of the scheme through March 16, 2020, when the Court entered its temporary 

restraining order and imposed an asset freeze [Doc. 8] (the “Initial TRO”), a significant portion 

of the Meta1 investor proceeds were sent or deposited into accounts controlled by the Shamoon 

Relief Defendants. [Id. at ¶ 6.] 

7. After the Court froze Shamoon’s accounts, Meta1 investor funds were directed to 

accounts controlled by the Warner Relief Defendants. [Id. at ¶ 8.] After the Court froze the 

Warner Relief Defendants’ accounts, Meta1 investor funds were directed to accounts controlled 

by Meta1 board member Richard Grassie. [Id. at ¶ 9.] Grassie continued a pattern established 

by Meta1 and Dunlap: open and use a bank account for a short period of time, deposit investor 

funds, spend investor funds on purposes not disclosed to investors, including the withdrawing of 

investor funds using cashier’s checks to pay other related third parties, and then open a new bank 

account at a different bank to repeat the process again. [Id. at ¶ 10.] 

8. Investor money was not used for the stated purpose of the investment. Instead, 

investor money was distributed to Meta1-related individuals, used to pay bills (such as credit 

card and loan payments), and used to pay personal expenses and costs associated with marketing 

the fraud scheme. [See id. at ¶¶ 15-17, 23.] When Grassie received investor funds paid with 

crypto assets into his Coinbase account,4

 he converted the crypto assets to U.S. dollars and 

transferred those funds to his bank accounts. [See id. at ¶ 13.] 

9. Based on the records the Commission obtained from the banks where investor 

funds were deposited, between April 1, 2018 and December 31, 2021, Meta1 raised at least 

 

4

 At some point, Meta1 began accepting legitimate crypto-assets, such a Bitcoin, as payment for their fake Meta1 

Coin. 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 9 of 21
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$15,250,847.22 from at least 800 investors in 40 states and 8 foreign countries. [Hahn Dec., at ¶ 

20.] To calculate the total disgorgement, the Commission started with the total amount raised of 

$15,250,847.22, and subtracted $1,317,260.86 in uncashed investor checks found at the time of 

the initial asset freeze and $482,373.47 in investor returns. Thus, the total amount of ill-gotten 

gains realized among the parties is $13,451,212.89. [Id. at ¶ 22.] 

10. Neither the Defaulting Defendants, nor the Warner Relief Defendants produced 

any kind of accounting, as the Court ordered them to do. Thus, the Commission’s calculations 

are reasonably approximate, based on the information available to it through subpoena responses 

from known third parties. [Id. at ¶ 21.] 

11. Schmidt admitted in his deposition that Dunlap paid him approximately $2,000 

per month for six to seven months via cashier’s checks. [Id. at ¶ 28.] He received $5,000 of 

investor funds from the Warner Relief Defendants, and another $19,210 from Meta1 and Dunlap. 

This amount is a low approximation, because it does not include money he received from his 

workshops where he pitched Meta1 investors, as those amounts are unknown. [Id. at ¶ 28.] 

12. The Commission’s requested disgorgement amounts and PJI calculations are 

summarized in the chart below, along with requested civil penalty amounts: 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 10 of 21
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[Id. at ¶ 31.] 

13. As to all parties, the Commission seeks to recover disgorgement so that it may 

return those funds to investors who lost significant sums of money when they invested money in 

the fraudulent scheme. The Commission believes that it is feasible to distribute the disgorged funds 

to the Defendants’ injured investors. If Defendants pay the disgorgement amount ordered by the 

Court, the Commission expects that it will be in a position to distribute the funds ordered to be 

disgorged to the known victims of Defendants’ fraud through a fund that will be administered by a 

distribution agent to be appointed by the Court, as set forth in the attached proposed final 

judgments. 

14. The Relief Defendants have no legitimate claim to the investor funds they acquired. 

[See Doc. 114.] 

 

5

 This amount excludes the amount the Commission has collected from the Shamoon Relief Defendants. 

Party Disgorgement PJI Penalty Total 

Meta1 and Dunlap, jointly and 

severally

$10,849,776.47 $939,183.45 $10,849,776.47 $22,638,736.39 

 Of that total disgorgement: 

Meta1 and Dunlap, jointly 

and severally 

$3,370,916.78 $291,794.87 

Meta1/Dunlap, jointly and 

severally with Shamoon Relief 

Defendants 

$5,938,180.215 $514,023.55 

Meta1/Dunlap jointly and 

severally with Bowdler

$1,540,679.48 $133,365.03 

Bowdler, jointly and severally with 

Meta1/Dunlap 

$1,540,679.48 $133,365.03 $1,540,679.48 

(individual 

penalty) 

$3,214,723.99 

Schmidt $24,210.00 $2,095.68 $24,210.00 $50,515.68 

Warner Relief Defendants, jointly 

and severally 

$1,057,408.63 $91,531.90 N/A $1,148,940.53 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 11 of 21
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III. 

ARGUMENT AND AUTHORITIES 

A. Legal Standards 

Disgorgement and PJI against Defendants, who are securities law violators, are both 

necessary and proper. See SEC v. Manor Nursing Ctrs., Inc., 458 F.2d 1082, 1104 (2nd 

Cir.1972) (“[T]he deterrent effect of an SEC enforcement action would be greatly undermined if 

securities law violators were not required to disgorge illicit profits.”). Section 21(d)(7) of the 

Exchange Act expressly authorizes courts to order disgorgement “[i]n any action or proceeding 

brought by the [SEC] under any provision of the securities laws.” 15 U.S.C. § 78u(d)(7); see 

also id. § 78u(d)(5) (“In any action or proceeding brought or instituted by the Commission 

under any provision of the securities laws, the Commission may seek, and any Federal court 

may grant, any equitable relief that may be appropriate or necessary for the benefit of 

investors”). 

“In the context of an offering of securities in violation of the securities laws, the proper 

starting point for a disgorgement award is the total proceeds received from the sale of the 

securities.” SEC v. Voight, et al., 2021 WL 5181062, at *7 (S.D. Tex. [Houston] June 28, 2021 

(Slip Copy) (quoting SEC v. Amerifirst Funding, Inc., 2008 WL 1959843, at *3 (N.D. Tex. May 

5, 2008)). Disgorgement is appropriate not only in cases of fraud, but also for any violation of the 

securities laws. SEC v. Rockwell Energy of Texas, LLC, No. H-09-4080, 2012 WL 360191, at *6 

(S.D. Tex. Feb. 1, 2012) (ordering disgorgement for securities registration violations). 

The Court has broad discretion in determining the amount of disgorgement. See, e.g., SEC 

v. Helms, et al., 2015 WL 5010298, *19 (W.D. Tex. Aug. 21, 2015) (citing SEC v. AMX, Int’l, Inc., 

7 F.3d 71, 73 (5th Cir.1993)). In Liu v. SEC, the Supreme Court reaffirmed the Commission’s 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 12 of 21
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authority to seek, and the Court’s authority to order, disgorgement “that does not exceed a 

wrongdoer’s net profits and is awarded for victims.” 140 S. Ct. 1936, 1940 (2020). Liu did not 

disturb the principle that disgorgement need only be a “reasonable approximation” of profits 

causally connected to the violation. See, e.g., Helms, 2015 WL 5010298, at *19 (citing SEC v. 

Seghers, 298 F. Appx. 319, 336 (5th Cir. 2008)). In addition, any risk of uncertainty in calculating 

the disgorgement amount falls on the wrongdoer whose illegal conduct created the uncertainty. 

Voight, 2021 WL 5181062, at *7 (quoting First City Fin’l Corp., 890 F.2d 1215, 1232 (D.C. Cir. 

1989). “[D]oubts are to be resolved against the defrauding party.” SEC v. MacDonald, 699 F.2d 

47, 55 (1st Cir. 1983). 

Once the SEC meets its initial burden of proving a reasonable approximation, the burden 

shifts to the defendants to show that the disgorgement amount is not a reasonable calculation. SEC 

v. Hallam, 42 F.4th 316, 341 (5th Cir. 2022); SEC v. Sneed, 2021 WL 4202171, at *10 (N.D. Tex. 

[Dallas] Sept. 10, 2021) (Slip copy) (citation omitted); Voight, 2021 WL 5181062, at *10 (citations 

omitted). A defendant’s current financial situation, or any hardship that disgorgement would 

impose, are not factors to be considered in determining disgorgement. SEC v. Warren, 534 F.3d 

1368, 1370 (11th Cir. 2008). 

Further, the Court has “flexibility” to impose joint and several liability against “individuals 

or partners” engaged in “concerted wrongdoing.” Liu, 140 S. Ct. at 1945, 1949. “Joint and several 

liability is appropriate in securities cases where, as here, individuals collaborate or have close 

relationships in engaging in illegal conduct.” SEC v. Halek, 537 F. App’x 576 (5th Cir. 2013) 

(punctuation omitted). 

B. The Court Should Set the Amount of Disgorgement and PJI as to the Defaulting 

Defendants and Warner Relief Defendants. 

 The Court has already found that disgorgement and PJI are appropriate as to the 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 13 of 21
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Defaulting Defendants and the Warner Relief Defendants. See Doc. 114. The Commission has 

demonstrated a reasonable approximation of disgorgement and has calculated PJI, as set forth 

below.

1. Meta1/Dunlap 

 The Commission seeks disgorgement from Dunlap and Meta1, jointly and severally, in 

the amount of $10,849,776.47 (inclusive of the joint and several amounts with Bowdler and the 

Shamoon Relief Defendants), which represents the amounts that Meta1/Dunlap raised from 

investors (approximately $14.1M), off-set by: (a) investor returns ($427,465); (b) uncashed 

checks found at the time of asset freeze ($1.3M); (c) payments to Schmidt ($19,210); and (d) the 

amounts collected from the Shamoon Relief Defendants pursuant to the Agreed Judgment 

($1.5M). [Hahn Dec. at ¶ 25.] Because this case involved a fraudulent offering scheme, where 

there were no actual investment activities, no legitimate business expenses exist to deduct. See 

Liu, 140 S. Ct. at 1945-46. The Commission calculated PJI from March 16, 2020 using a PJI 

calculator program, which came to $939,183.45. [Hahn Dec. at ¶ 30-31.] 

Joint and several liability is appropriate here. First, Dunlap created, owns, and controls 

Meta1. [Compl. ¶ 14.] Meta1 and Dunlap acted together as one economic unit, commingling 

investor funds and using them as one account. [Hahn Dec. at ¶ 25.] Each were partners in 

concerted wrongdoing, and are equally culpable for the fraudulent scheme. See Liu, 140 S.Ct. at 

1949; SEC v. Halek, 537 Fed. App’x 576, 581 (5th Cir. 2013); SEC v. United Energy Partners, 

Inc., 88 Fed. Appx. 744 (5th Cir. 2004). Second, Bowdler and Dunlap are a couple who live 

together, have a child together, and are partners in concerted wrongdoing. Bank records show 

that Bowdler received investor funds from Meta1, but then commingled those funds in Meta1 

bank accounts controlled by Dunlap. It is not possible to trace what happened to the money that 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 14 of 21
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Bowdler received beyond that point, as Dunlap had a pattern of closing bank accounts and 

moving funds to new accounts. [Hahn Dec. ¶ 27.] Third, the Court has already ordered the 

Shamoon Relief Defendants to pay, jointly and severally, disgorgement of $7,457,998, with a 

remaining balance owed of $5,938,180.21. [See Hahn Dec. at ¶ 26.] Meta1 and Dunlap 

directed the actions of the Shamoon Relief Defendants, were partners with them in concerted 

wrongdoing, and are equally culpable for the fraudulent scheme. See Liu, 140 S.Ct. at 1949. 

Thus, the amounts the Commission seeks reflect joint and several liability in various portions, as 

shown in the chart in paragraph II.12, above. 

2. Bowdler 

Bowdler personally received at least $1,540,679.48 in Meta1 investor funds. [Hahn Dec. 

at ¶ 27.] Bowdler ultimately deposited and commingled those funds in Meta1 bank accounts 

controlled by Dunlap and Meta1-related individuals. [Id.] It is not possible to trace what 

happened to the money Bowdler received beyond that point, as Dunlap had a pattern of closing 

bank accounts and moving funds to new accounts. [Id.] The Court should hold Meta1/Dunlap 

jointly and severally liable for the proceeds Bowdler received, because they were engaged in 

concerted wrongdoing. See Liu, 140 S.Ct. at 1949. The Commission calculated PJI at 

$133,365.03. [Hahn Dec. ¶ 31, Ex. 3.] 

3. Warner Relief Defendants 

Based on a review of the bank records, the Warner Relief Defendants received at least 

$1,117,316.75 in investor funds after accounting for amounts transferred to Meta1 or affiliated 

entities. From this total, the Commission deducted investor refunds ($54,908.12) and amounts 

paid to Schmidt ($5,000). This left $1,057,408.63 of investor funds in their possession, to which 

they have no legitimate claim. [Hahn Dec. at ¶ 29.] 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 15 of 21
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Joint and several liability between the Warner Relief Defendants is appropriate because 

Traversie and Warner are a married couple who both control Ironheart, which is the bank 

account where investor funds are commingled. Investor funds were commingled in accounts 

held in all three of their names. Both individuals and the entity they control equally possess 

Meta1 investor funds and it is not possible to apportion amounts among them. [Id.] 

PJI on the amount of ill-gotten gains they have received is $91,531.90. [Id. at 31, Ex. 3.] 

C. The Court Should Order Schmidt to Pay Disgorgement and PJI in the Amounts 

Requested. 

Disgorgement against Schmidt, a securities law violator, is both necessary and proper. 

See Manor Nursing, 458 F.2d 1082 at 1104; see also Sneed, 2021 WL 4202171, at *10 

(“Disgorgement is an equitable remedy meant to prevent the wrongdoer from enriching himself 

by his wrongs.”) (internal quotations and citations omitted). Schmidt admitted in his deposition 

that Dunlap paid him approximately $2,000 per month for six to seven months via online 

transfers or cashier’s checks. [Hahn Dec. at ¶ 28, Ex. 2 at 21:23-22:2, 22:22-24:25.] He 

received $5,000 of investor funds from the Warner Relief Defendants, and another $19,210 from 

Meta1 and Dunlap. [Id.] This amount is a low approximation, because it does not include 

money he received from his workshops where he pitched Meta1 investors, as those amounts are 

unknown.6

 [Id.] PJI on his ill-gotten gains is $2,095.68. [Id. at ¶31, Ex. 3] 

D. The Court Should Impose Maximum Civil Penalties on the Defendants for their Illegal 

Conduct. 

The Securities Act and the Exchange Act both authorize courts to impose civil penalties, 

 

6

 Schmidt testified that he received between $2,000 and $5,000 for each workshop he hosted, and did them “about 

every three weeks.” [Hahn Dec. at Ex. 2. at 22:22-23:9.] He testified that doing the workshops his income was 

“probably around maybe 60-$70,000,” but he has not filed tax returns for 2018 or 2019. [Id. at 23:6-23:16.] The 

Commission did not include this amount in its requested disgorgement, because it cannot prove which workshops 

were related to Meta1. However, as the Complaint makes clear, Schmidt hosted many workshops nationwide in 

order to lure people to invest in Meta1. [See, e.g., Compl. at ¶¶ 16, 71-73.] 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 16 of 21
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and establish an escalating, three-tier structure for securities violations depending upon the 

egregiousness of the defendant’s conduct and the losses (or risk of losses) to investors. 15 

U.S.C. §77t(d); 15 U.S.C. §78u(d)(3), and 17 C.F.R. 201.1001 (increasing statutory amounts to 

reflect inflation). These penalties are designed to punish individual violators and deter future 

violations of the securities laws, which is necessary because, without civil penalties, the only 

financial risk to violators is the forfeiture of their ill-gotten gains. Voight, 2021 WL 5181062, 

at *14 (quotations and citations omitted). 

A third tier penalty, which is appropriate here, requires that the violation “involve fraud, 

deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement” and that 

“such violation directly or indirectly result in substantial losses or create a significant risk of 

substantial losses to other persons.” Id. The maximum civil penalty is the greater of the gross 

amount of pecuniary gain or the statutory maximum per violation. 15 U.S.C. § 78u(d)(3). The 

maximum penalty amounts applicable here would be the amount of gross pecuniary gain to the 

Defaulting Defendants per violation, and $207,183 per violation for Schmidt. See 15 U.S.C. 

§77t(d); 15 U.S.C. §78u(d)(3), and 17 C.F.R. 201.1001. Although the statutory tier determines 

the maximum penalty allowed per violation, the actual amount of the penalty to be imposed is 

left to the Court’s discretion.7

 See Voight, 2021 WL 5181062, at *14 (citing SEC v. Kern, 425 

F.3d 143, 153 (2nd Cir. 2005)). 

The record of this case—including the allegations in the Complaint, which must be 

 

7

 The same factors the Court considers in determining whether to award injunctive relief are relevant in 

determining whether a civil penalty is appropriate and, if so, in what amount: “(1) the egregiousness of the 

defendant’s conduct; (2) the degree of the defendant’s scienter; (3) whether the defendant’s conduct created 

substantial losses or the risk of substantial losses to other persons; (4) whether the defendant’s conduct was isolated 

or recurrent; (5) whether the defendant has admitted wrongdoing; and (6) whether the penalty should be reduced due 

to the defendant’s demonstrated current and future financial condition.” SEC v. Life Partners Holdings, Inc., 71 F. 

Supp. 3d 615, 623 (W.D. Tex. 2014). 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 17 of 21
14 

accepted as true—provides ample factual justification for imposing third-tier penalties of at least

the amounts requested. Defendants’ egregious and illegal actions caused investors worldwide to 

suffer a loss (or, at the very least, a risk of loss) of over $15 million in repeated, continuing 

violations. 

Each of the Defendants engaged in contemptuous conduct resulting in this Court issuing 

arrest warrants as to Dunlap and Schmidt. The Defendants have filed documents with the Court 

rejecting its jurisdiction, claiming that the SEC is illegitimate, and threatening the Court and the 

SEC. [See Docs. 18, 27, 35, 42 (Schmidt’s letter following the arrest warrant and contempt 

order attacking SEC counsel and accusing the Court of “malicious judicial misconduct.”)] 

Throughout the relevant period, Defendants engaged in repeated, egregious fraudulent 

conduct evidencing a high degree of scienter. At the most basic level, the investment they 

touted—the Meta1 Coin—did not actually exist. Instead, it was all a scam. [Compl. ¶ 81.] 

Schmidt and Dunlap repeatedly told listeners on internet radio shows that, among other things: 

(1) the Coin is “safe and secure” and protected from “government intervention;” (2) the Coin is 

based on asset value that will never drop, and cannot be sold for less than asset value; and (3) in 

two years, “50,000 a coin is going to be a very conservative value.” [Id. at 77.] Dunlap 

currently offers and sells his pretend Coin for $377 each, and he represents to the public that 

Meta1 owns and backs its securities with $8.8 billion of gold—an absurd claim. Moreover, 

following each asset freeze issued in this case, Dunlap simply found other people to funnel 

investor funds through so that he could continue to steal from investors. [See Hahn Dec. at ¶¶ 6-

10.] 

Bowdler, a co-founder of Meta1, remains active in soliciting investors and creating the 

illusion that their Coin is real. Her LinkedIn page shows that she has been involved with Meta1 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 18 of 21
15 

since the beginning. [See Hahn Dec., at Ex. 5.] She holds the titles of “Director of Business 

Development,” and “Asset Management Specialist,” and is responsible for “technical sales and 

relations within the market place.” [Id.] She is the “client liaison and global ambassador for 

META 1 Coin.” [Id.] In this role, she has solicited investors, telling them that they could get in 

on the ground floor before the initial public offering of the Coin, or “ICO.” [Compl. ¶ 23] She 

knew, or was severely reckless in not knowing, that Meta1 had no actual plans, and no ability, to 

launch an ICO, and that Meta1 owned no assets to back the Coin. [Id. at 52.] Bowdler has also 

furthered the lie that Meta1 Coins are backed by $1 billion of fine art. [See id. at 61-62; Hahn 

Dec. at Ex. 4 (LinkedIn profile describing her role as “Developing relationships within the Fine 

Art community to ensure stability within our coin”).] 

Far from taking responsibility for her actions or acknowledging wrongdoing, Bowdler 

has actively resisted the SEC’s pre-litigation investigations and its subsequent communications 

after filing this case. [See Order on Contempt, Doc. 39, at p. 2.] She willfully disregarded the 

Court’s restraining order and orders requiring her to provide a sworn accounting of investor 

funds, among other orders. [Id. at 9.] The Court has already found her conduct in the litigation 

to be contemptuous. And although she received copies of all of the Court’s orders on contempt 

[see Doc. 49], she continued to ignore the orders. As for her financial condition, she personally 

received over $1.5 million in investor funds that the SEC knows about, and as she lives with 

Dunlap, benefits from the millions he has misappropriated as well, so that factor weighs in favor 

of severe penalties. 

As for Schmidt, the fact that it took his arrest to get him to appear for his deposition 

further demonstrates the egregiousness of his conduct.8

 His actions, as chronicled throughout 

 

8

 During his deposition, Schmidt repeatedly screamed at counsel when asked basic questions about what he told 

investors. [See e.g., Hahn Dec., Ex.2 at 213:3-215:23.] 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 19 of 21
16 

the Complaint, demonstrate a high degree of scienter, recurring continually until at least the 

point that he signed the Consent decree. His sworn deposition testimony revealed a lack of 

understanding of his actions and the harm caused to investors, and gives no assurance that he is 

done with Meta1. For example, he testified that he would not talk about Meta1 to his audience 

“until this stuff is cleared up.” [Hahn Dec., Ex. 2 at 234:1-24.] 

Finally, Schmidt’s current financial situation is unknown, but he has represented to the 

Commission and to the Court that he has modest assets. The SEC is unaware of his current 

sources of income. This factor is neutral, unless and until Schmidt provides evidence to 

demonstrate his current financial condition. Weighing all of the factors, the record supports 

severe penalties, in at least the amount of his ill-gotten gains. Maximum statutory penalties the 

Court could impose are $207,183 per violation, of which there are countless, since every 

misrepresentation to every investor and every offer of unregistered securities is a separate 

securities violation. The Court has discretion to impose severe penalties here. 

For all the reasons stated above, as to each Defendant, the Court should impose severe 

penalties in at least the amounts requested. 

IV. 

CONCLUSION 

For the foregoing reasons, the Court should grant the Commission’s motion in 

full and enter the attached order and proposed Final Judgments. 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 20 of 21
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CERTIFICATE OF SERVICE 

I certify that on September 22, 2022, I electronically submitted the foregoing document 

with the clerk of court for the U.S. District Court, Western District of Texas, using the electronic 

case filing system of the court. I hereby certify that I have served all parties according to FED. R.

CIV. P. 5(b)(2). 

 /s/ Jennifer D. Reece 

 Jennifer D. Reece 

Case 1:20-cv-00273-RP Document 133 Filed 09/22/22 Page 21 of 21