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A self-proclaimed “blockchain evangelist” pleaded guilty to securities fraud on Friday after raising $21 million for an initial coin offering (ICO) through “a series of false and misleading statements,” the Justice Department said.
Michael Alan Stollery, the CEO of Titanium Blockchain Infrastructure Services Inc., admitted to forging white papers on his firm’s initial coin offering, planting fake customer reviews and falsely claiming a relationship with the Federal Reserve, prosecutors said.
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“Stollery further admitted that he did not use the money invested as promised, but instead mixed the ICO investors’ funds with his personal funds, using at least a portion of the proceeds from the offering for non-related expenses TBIS, like credit card payments and paying bills for Stollery’s condo in Hawaii,” the Justice Department said in a news release Monday.
The crypto CEO used investor funds to pay bills for his condo in Hawaii, the DOJ said. (iStock / iStock)
Stollery also failed the ICO with the SEC, which obtained an emergency court order shutting down the system in 2018.
“This ICO was based on a social media marketing blitz that allegedly deceived investors with purely fictitious claims about business prospects,” Robert A. Cohen, the head of the SEC’s enforcement division’s cyber unit, said at the time.
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A lawyer for Stollery did not immediately respond to a request for comment Monday.
Stollery faces up to 20 years in prison if convicted in November.