An Atlanta movie producer has not too long ago pleaded responsible to wire fraud and cash laundering prices for selling fraudulent crypto funding schemes that defrauded traders of over $2.5 million.
Man Pleads Responsible to ICO Fraud
In an official statement, the U.S. Division of Justice (DOJ) revealed that the 48-year-old convict, Ryan Felton, promoted an preliminary coin providing (ICO) for an leisure streaming platform dubbed FLiK in 2017.
Felton claimed the platform would surpass the favored streaming service Netflix. To additional encourage traders to purchase the FLiK cash, the movie producer asserted that the corporate was co-owned by a distinguished Atlanta rapper and actor, who was fined by the U.S. SEC in 2020.
The convict additionally advised traders that the U.S. army had agreed to distribute FLiK and that the platform was already finalizing licensing offers with main studios. The DOJ famous that none of those claims have been true.
Felton satisfied traders that he was actively creating the platform and would use all of the proceeds from the ICO sale to launch FLiK formally. Nonetheless, as quickly because the ICO ended, he dumped the over 40 million FLiK cash he held, which precipitated the token’s worth to plummet, leaving traders with nugatory belongings.
The Justice Division additionally identified that as a substitute of utilizing investor funds to develop FLiK as promised, the movie producer diverted the proceeds from the token sale, value roughly $2.4 million, to his private account.
Felton used this cash to fund his extravagant life-style, together with a $1.5 million residence, diamond jewellery, and a Ferrari, amongst different automobiles.
Identical Man, Totally different Schemes
In line with the DOJ, Felton performed an identical scheme for a crypto trade known as CoinSpark in 2018. He made a number of false claims to draw traders to the Spark coin ICO.
The convict claimed that traders would obtain 25% of the trade’s income in dividends and {that a} famend accounting agency would audit CoinSpark’s funds each quarter.
As was the case with FLiK, not one of the claims have been true. He raised over $200,000 within the ICO and subsequently advised traders that CoinSpark would now not be capable to present the 25% promised, providing to refund their investments.
Nonetheless, Felton ignored traders’ demand for a refund and diverted the funds to his private account.
Talking on the case, Legal professional Ryan Ok. Buchanan mentioned: “The defendant used Twenty first-century expertise to perpetrate an age-old fraud: mendacity to traders to steal their cash and fund his personal lavish life-style. Felton’s conviction ought to function a warning to anybody who seeks to capitalize on rising expertise to victimize others.”
Felton pleaded responsible to 12 counts of wire fraud, ten counts of cash laundering, and two counts of securities fraud, which have been added on the fourth day of his jury trial. His sentencing listening to is but to be scheduled.
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