Department of Justice officials have detailed the guilty plea of the Titanium Blockchain Infrastructure Services (TBIS) CEO for his role in a cryptocurrency fraud scheme involving an initial coin offering.
The initial coin offering (ICO) raised approximately $21 million from investors in the United States and overseas.
Per court documents, Michael Alan Stollery, 54, of Reseda, Calif., was the CEO and founder of TBIS, a purported cryptocurrency investment platform, which touted itself as a cryptocurrency investment opportunity while luring investors to purchase BARs, the cryptocurrency token or coin offered by TBIS’s ICO, through a series of false and misleading statements.
According to the Department of Justice, although required to do so, Stollery did not register the ICO regarding TBIS’s cryptocurrency investment offering with the Securities and Exchange Commission (SEC), nor did he have a valid exemption from the SEC’s registration requirements.
Stollery admitted to enticing investors by falsifying aspects of TBIS’s white papers, which allegedly offered investors and prospective investors an explanation of the cryptocurrency investment offering.
Stollery also planted fake client testimonials on TBIS’s website, according to the Department of Justice, and falsely claimed he had business relationships with the Federal Reserve and prominent companies to create the false appearance of legitimacy.
Additionally, the Department of Justice indicated Stollery admitted he did not use the invested money as promised but commingled the ICO investors’ funds with his personal funds.
Stollery pleaded guilty to one count of securities fraud in the Central District of California and is scheduled to be sentenced on Nov. 18. He faces up to 20 years in prison.