An Atlanta movie producer has lately pleaded guilty to wire fraud and money laundering bills for promoting faux crypto funding schemes that defrauded investors of over $2.5 million.
Man Pleads Guilty to ICO Fraud
In an dependable tell, the U.S. Department of Justice (DOJ) revealed that the 48-365 days-former convict, Ryan Felton, promoted an initial coin offering (ICO) for an entertainment streaming platform dubbed FLiK in 2017.
Felton claimed the platform would surpass the long-established streaming provider Netflix. To further encourage investors to purchase the FLiK coins, the movie producer asserted that the company used to be co-owned by a excellent Atlanta rapper and actor, who used to be fined by the U.S. SEC in 2020.
The convict additionally told investors that the U.S. military had agreed to distribute FLiK and that the platform used to be already finalizing licensing deals with important studios. The DOJ indispensable that none of these claims were fair.
Felton glad investors that he used to be actively increasing the platform and would affirm all of the proceeds from the ICO sale to launch FLiK formally. Alternatively, as rapidly as the ICO ended, he dumped the over 40 million FLiK coins he held, which prompted the token’s cost to plummet, leaving investors with worthless belongings.
The Justice Department additionally identified that as an different of the usage of investor funds to like FLiK as promised, the movie producer diverted the proceeds from the token sale, value approximately $2.4 million, to his personal story.
Felton used this money to fund his extravagant lifestyle, together with a $1.5 million home, diamond jewelry, and a Ferrari, among other automobiles.
Same Man, Diversified Schemes
According to the DOJ, Felton conducted a the same scheme for a crypto change referred to as CoinSpark in 2018. He made several counterfeit claims to attract investors to the Spark coin ICO.
The convict claimed that investors would win 25% of the change’s profits in dividends and that a famend accounting firm would audit CoinSpark’s funds each quarter.
As used to be the case with FLiK, none of the claims were fair. He raised over $200,000 within the ICO and therefore told investors that CoinSpark would no longer be ready to present the 25% promised, offering to refund their investments.
Alternatively, Felton skipped over investors’ query for money encourage and diverted the funds to his personal story.
Talking on the case, Attorney Ryan K. Buchanan acknowledged: “The defendant used 21st-century expertise to perpetrate an age-former fraud: lying to investors to grab their money and fund his beget lavish lifestyle. Felton’s conviction may perchance per chance well like to relief as a warning to anybody who seeks to capitalize on emerging expertise to victimize others.”
Felton pleaded guilty to twelve counts of wire fraud, ten counts of money laundering, and two counts of securities fraud, which were added on the fourth day of his jury trial. His sentencing listening to is but to be scheduled.
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