SEC Freezes Assets of Online Auction Portal and Its CEO Associated With $23 Million Offering Fraud

Targeted News Service |

WASHINGTON, -- The Securities and Exchange Commission issued the following litigation release:

* * *

- Securities and Exchange Commission v. Collector's Coffee (d/b/a Collectors Cafe), and Mykalai Kontilai, No. 19-Civ-04355 (S.D.N.Y. filed )

* * *

The Securities and Exchange Commission yesterday filed fraud charges against Collectors Cafe, an online auction portal, and its chief executive officer, Mykalai Kontilai, for misappropriating over $6 million of investor funds in a $23 million offering fraud. The SEC obtained an emergency asset freeze and other relief.

According to the SEC's complaint filed in U.S. District Court for the Southern District of New York, Collectors Cafe and Kontilai, a New York resident, operated a fraudulent scheme that raised more than $23 million from at least 140 investors since . To entice investors, Collectors Cafe and Kontilai allegedly falsely stated that Collectors Cafe had hundreds of dealers signed up to sell billions of dollars of inventory. Additionally, Kontilai allegedly misrepresented the extent of Collectors Cafe's purported interest in two contracts signed by Jackie Robinson, the first African American to play for a major league sports team, by falsely claiming the company owned a $36 million asset with the Jackie Robinson contracts, when Collectors Cafe owned only a fraction of such asset. The SEC also alleges that Kontilai misappropriated at least $6.1 million of the $23 million raised in investor funds by funneling millions of dollars through his personal bank account, withdrawing millions in cash, and charging personal expenses and luxury items to Collectors Cafe credit and debit cards. The SEC's complaint also alleges that Kontilai attempted to conceal this fraudulent conduct by producing fabricated documents to the SEC, including documents that purported to show that Kontilai loaned millions of dollars to Collectors Cafe.

The SEC's complaint charges Collectors Cafe and Kontilai with violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctions, disgorgement plus prejudgment interest, and penalties.

The SEC's investigation was conducted by Jacqueline M. Moessner and supervised by Mary S. Brady of the Denver Regional Office. The SEC's litigation is being led by Mark L. Williams and Terry Miller, and supervised by Gregory Kasper.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:



Symbol Last Price Change % Change










Blockchain in Fintech - Discussion at the EU Parliament

From the recent Blockchain For Europe Summit in Brussels: Panel on Financial Market Infrastructure