Silicon Valley Startup CEO Charged With Wire Fraud

The founder and CEO of a failed startup has pleaded guilty for defrauding former employees.

According to the U.S. Justice Department, Isaac Choi, the founder and CEO of WrkRiot, admitted to luring employees to work at his company based on “misleading statements about his educational, professional and financial background, and by enticing them to continue working for his company through forged documents purportedly reflecting salary payments that were never made.”

San Jose’s The Mercury News reported that the 36-year-old lied to employees about his financial, educational and professional background.

“In total, Choi collected hundreds of thousands of dollars from his own employees through false representations about the company’s financial health and his own ability to financially support WrkRiot in its early stages of development,” according to an indictment filed in June 2017.

Choi pleaded guilty to one count of wire fraud, admitting that he never attended business school, was never employed by a financial institution at any point in time and exaggerated his wealth.

In addition, Choi acknowledged that in August 2016, he emailed several of WrkRiot’s employees fake wire transfer confirmations that tricked them into believing he had paid their salaries so they would keep working at the failing company.

Choi, who went by a number of aliases, including Yi Suk Choi, Yisuk Choi, Yi Suk Chae and Isaac Chae (Choi), recently lived in Orange County, California. On Monday, after seven months in custody, he appeared in front of a judge in the Northern District of California.

Choi will be sentenced on May 24. He faces up to 20 years in prison and a $250,000 fine.

This case was investigated by the FBI’s San Jose resident agency. Trial Attorney Cory E. Jacobs of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jeff Schenk of the U.S. Attorney’s Office for the Northern District of California are prosecuting the case.


Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.


To Top