ico scam jail time

They also alleged that the pair paid other gaming influencers to promote the website to their social media circles.

The complaint, which the FTC characterized as their first ever against individual social media influencers, ended with a settlement but no fine, just a warning, as the FTC said it normally didn’t fine defendants for a first offense. Still, they sent out letters to 21 influencers warning them about their future behavior. “Consumers need to know when social media influencers are being paid or have any other material connection to the brands endorsed in their posts,” Chairman Maureen Ohlhausen said in a statement.

ICO Scams

In 2017, billions of dollars poured into the blockchain space thanks to ICOs, or Initial Coin Offerings. ICOs allowed new crypto companies to crowdsource funding outside of the regulation-intensive process of a traditional IPO.

Ico scam jail time

US attorney Ilan Graff explained the fraud, saying,

“Farkas and his co-conspirators created fictitious executives and fabricated business relationships with legitimate institutions to dupe investors into handing over millions of dollars for a fraudulent ICO. We will continue to aggressively pursue frauds like this one, whether they involve traditional securities or newer financial instruments and crypto-assets.”

The tokens eventually turned out useless while Farkas and the other co-founders of Centra went on to live a lavish life with the investor funds.

ICO mania took over celebrities

The executive team of Centra lied about their CEO and claimed that he was educated at Harvard. They also made several other misrepresentations about their business.

Ico scammer jail time

The US Department of Justice announced on Monday that Michael Alan Stollery, the CEO and Founder of the $21 million initial coin offering (ICO) scam of Titanium Blockchain Infrastructure Services pled guilty to his crime.

He pled guilty to one count of securities fraud and is now facing jail time of up to 20 years. His sentencing has been scheduled for November 18 at a federal district court.

The Titanium ICO defrauded investors in both the United States and overseas until the SEC stopped the offering with a court order in May 2018.

The 54-year-old admitted that he touted the cryptocurrency project to be an investment opportunity to lure investors through false and misleading statements.

This is while the asset freezing orders against Dominic Lacroix and DL Innov Inc. and the AMF is continuing its investigation to determine whether charges will be laid against the accused and his company in this case.

As was reported at the time, Dominic Lacroix and DL Innov Inc. were convicted of contempt of court on October 17, 2017. The judge then pointed out that the evidence filed by the AMF demonstrated beyond doubt that Dominic Lacroix and DL Innov Inc., under the brand of Plexcorps and Plexcoin, had continued to solicit and offer consumers an investment in Plexcoin, an ICO token, despite the fact that they were targeted by orders preventing them from doing so since July 20, 2017. The judgment declaring Dominic Lacroix and DL Innov Inc.

Ico scam jail time-

Attorney Ilan Graff stated, “Sohrab Sharma led a scheme to deceive investors by falsely claiming that the start-up he co-founded had developed fully functioning, cutting-edge cryptocurrency-related financial products. In reality, Sharma’s most notable inventions were the fake executives, fake business partnerships, and fake licenses that he and his co-conspirators touted to trick victims into handing over tens of millions of dollars.”

Graff reiterated his office’s commitment to stamping out crime in the digital currency industry, stating, “We will continue to aggressively pursue digital securities frauds like this one.”

Sharma joins his fellow cofounder Robert Farkas who was sentenced to jail in December 2020. Farkas had pleaded guilty as well, admitting to have committed wire fraud and conspired to commit securities fraud.

Ico scam jail time-lapse

However, the actor concealed he was paid for such support making it look like his own goodwill.

A cryptocurrency scam called “Bitcoin Era” also involved the names of two celebrities, Tesla founder Elon Musk and the present James Bond, an actor Daniel Craig. The project promised its investors huge profits within a short period of time. This time, the celebrities had no idea their names were used for the advertising.

Lately, the number of cryptocurrency scams has increased significantly.
Partially, it is related to the panic caused by the outrage of COVID-19, making it easier for the scammers to attract victims and get away with their deeds. The outbreak of illegal projects has even caused Interpol to turn to the means of artificial intelligence to combat this criminal trend.

Ico scam jail time-out

These crimes could have seen him land in jail for up to 10 years. However, a Manhattan court only sentenced him to one year and one day in jail. He also had to forfeit $347,000 he gained illegally from the scam and an expensive Rolex watch.

The two founded Centra Tech in 2017, alongside Raymond Trapani who has also been arrested and pleaded guilty to his crimes as well.

They managed to enlist celebrities to lure investors.
They brought onboard Mayweather and Grammy Award-winning producer DJ Khaled as promoters. The two celebrities had to settle with the SEC for not disclosing that they received compensation to promote the scam.

In addition, Centra Tech claimed to have partnered with Bancorp, Mastercard and Visa to issue Centra Cards.

So scammers and influencers have started turning to a newer and grayer area: NFTs. (Read a primer on NFTs here.) “NFTs have a more dubious, strange value,” Findeisen says. “So that when inevitably, when your NFT crashes to zero after you’ve dumped it on your fans… you can say “Well, look, you still got a piece of art.”

Winnet says that he’s seen several of the same bad actors in previous schemes happily sell their followers on NFTs. “These are the same people that, a year ago, were telling everybody how you can earn £10,000 a month from your podcast…These are the same people that were doing property events,” he says. “They just move from grift to grift.”

Incoming regulation

Findeisen believes that a change is coming—even though, right now, scams are soaring.

ICO scam.

A Texas Federal court sentenced Jared Rice Sr. this week after he pleaded guilty to one count of securities fraud over his role at AriseBank, reports Latin Times.

The 33-year-old claimed AriseBank offered investors bank accounts insured by the Federal Deposit Insurance Corporation (FDIC), alongside Visa debit and credit cards.

Rice also tempted marks with promises of crypto-related services powered by the platform’s own cryptocurrency, AriseCoin, which he sold in an initial coin offering (ICO) in late 2017.

These and other bold claims (Rice said AriseBank was a “banking revolution”) saw eager investors pump a total of $4.25 million in fiat and crypto into AriseCoin.

As it turned out, AriseBank didn’t have authorization to offer such services in Texas.

Authorities in North America seem be among the most proactive in the world with regards to dealing with individual ICOs. The latest example of this comes from Canada where the man behind Plexcoin is now facing jail time while an investigation against him is still ongoing.

Québec’s Autorité des Marchés Financiers (AMF), the regulatory and supervisory body of the Canadian province’s financial sector, has announced that the perpetrator of the PlexCoin ICO scam will be going to jail and will have to pay a large penalty along with his company.

The Quebec Superior Court sentenced Dominic Lacroix and DL Innov Inc. on Friday to two months imprisonment and fines totaling $110,000 for contempt of court, the maximum penalties applicable by the law.

This penalty is among the most severe ever given for contempt of court by the tribunal, the AMF notes.

He believes that governmental agencies and a growing group of amateur sleuthers like himself and others on YouTube are finally taking notice of these scams and building cases using trails of information stored on the blockchain. The U.S. Department of Justice, for example, launched a National Cryptocurrency Enforcement Team last year and seized $3.6 billion in stolen Bitcoin in February. But people hoping to catch scammers no longer need to be from a law enforcement agency.

“In the past, you had to be the FBI… I think a lot of influencers, banks and governments don’t realize how much the blockchain is going to change the way we report things,” Findeisen says.
“There’s sort of a crowdsourced intelligence around catching these scams, because now everyone can access all these financial records. So I think a lot of people are going to see old cases start getting prosecuted.

The US securities and exchange commission recently revealed that it charged a former Washington State Senator in Federal court with having links to fraudulent ICO Meta 1 Coin

Finance Magnates news outlet reported that the former Senator was charged alongside two other men for defrauding investors of close to $5 million in their Meta 1 Coin ICO Scam. SEC further revealed that the victims are not only US residents but also people living abroad who participated online.

According to the financial regulator, Dave Schmidt didn’t work alone. There are another two men involved in this scheme, Robert Dunlap and Nicole Bowdler.

According to American law, the trio faces up to 20 years in prison and a $1 million fine once convicted.

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