The CEO of Titanium Blockchain Infrastructure Services Inc. (TBIS) has pleaded guilty to involvement in a $21 million cryptocurrency fraud scheme, according to the Department of Justice.
In a news release on Monday, DOJ said the CEO, Michael Alan Stollery, pleaded guilty to one count of securities fraud.
According to court documents, Stollery touted his crypto firm as a cryptocurrency investment opportunity, urging investors to purchase BARs, TBIS’s type of coin token service, through a series of false statements. Justice said Stollery did not register his company’s initial coin offering (ICO) to the Securities and Exchange Commission (SEC) and did not have a valid exemption.
Stollery also told authorities that he falsified his company’s white papers, which give investors an explanation of the cryptocurrency investment offering and the purpose and technology behind the offering.
Justice also said that Stollery posted fake client testimonials on his company website and falsely claimed that he had a good relationship with the Federal Reserve and a dozen of prominent companies.
It said he had admitted commingling money from investors with personal funds that were used for reasons unrelated to his company, including credit card payments and the payment of bills for his condominium in Hawaii.
Stollery, 54, faces up to 20 years in prison and is scheduled to be sentenced on November 18.