Titanium Blockchain Infrastructure’s (TBIS) CEO, Michael Alan Stollery, pleaded guilty Friday (July 22) for his role in a crypto fraud scheme in which he used investor funds for his own purposes, a press release from the Department of Justice (DOJ) said Monday.
The scheme had to do with TBIS’s initial coin offering (ICO), called BARs, which raised $21 million from investors. Stollery did not register the ICO with the Securities and Exchange Commission (SEC) as required.
The report said Stollery admitted that he falsified some parts of the white papers, which offered investors an explanation for the investment offering, including its purpose and technology and how it was different from other such opportunities.
He admitted that he didn’t use the invested money as promised and had used part of it for expenses unrelated to TBIS, comingling the funds with his personal money for things like credit card or bill payments, including for a Hawaii condominium.
Stollery pleaded guilty to one count of securities fraud, and will be sentenced in Nov. 18. He faces up to 20 years in prison.
Crypto fraud has not been a novel thing in recent years. PYMNTS wrote that the SEC has charged a brother and sister in March for allegedly defrauding thousands of investors out of over $124 million, through two unregistered, fraudulent offerings of securities for the Ormeus Coin token.
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See also: SEC Charges Siblings in $124M ‘Snake Oil’ Crypto Scam
John and JonAtina (Tina) Barksdale are facing charges of violating federal securities laws, manipulating the price of their coin and using investor money for personal expenses.
Melissa Hodgman, associate director in the SEC’s Division of Enforcement, called the two “modern-day snake-oil salesmen” who used social media and other promotions to benefit themselves.
“We will continue to vigorously pursue persons who sell securities in schemes to defraud the investing public, no matter what label the promoters apply to their products,” Hodgman said.
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