In brief Ex-senator David Schmidt has been charged alongside two others with defrauding investors.

The defendants allegedly promised investors returns of up to 224,923% with art- or gold-backed coins.

Investors never saw a return and money was allegedly spent on luxury cars.

The US Securities and Exchange Commission (SEC) said today that it had secured an asset freeze for a former Washington state senator and two others for their alleged involvement in a crypto scam that swindled investors out of $4.3 million.

According to the SEC, over 150 people in the US and around the world were duped into investing in the “Meta 1 Coin”—which promised returns of up to 224,923%. The SEC alleges that, along with Florida residents Robert Dunlap and Nicole Bowdler, former Washington state senator David Schmidt used investor funds to buy fancy cars—including a $215,000 Ferrari.

The SEC alleges that the trio told people the digital asset was backed by a $1 billion art collection or $2 billion of gold. However, investors never received the cryptocurrency, nor saw a return. Investors were also allegedly told that “Meta 1 Coin” was risk-free and could never lose value.

“As we allege, the defendants made audacious claims about the Meta 1 Coin and would say almost anything to separate investors from their money,” David Peavler, regional director of the SEC’s Fort Worth office, said in a statement. “Investors should always look skeptically at promoters who claim that their investment cannot lose value or that investors will receive massive returns.”

The SEC’s complaint was filed in the Western District of Texas this week and “charges the Meta 1 Coin Trust, Dunlap, Bowdler, and Schmidt with violating anti fraud and securities registration provisions of the federal securities laws.”

David Schmidt, a Republican, started his political career in the Washington State House of Representatives in 1994 and served as a state senator from 2003 to 2010.