A famous film producer from Atlanta has been found guilty of wire fraud and money laundering charges for encouraging fraudulent crypto investment schemes. These crypto schemes have allegedly duped around $2.5 million in investment funds.
Film Producer from Atlanta Pleads Guilty to ICO Fraud
In their official statement, the U.S. Department of Justice (DOJ) indicated that the 48-year-old convict, Ryan Felton, publicized an initial coin offering (ICO) for an entertainment streaming platform dubbed FLiK in 2017.
Felton asserted the platform would overtake the popular streaming service Netflix. To further nudge investors to buy the FLiK coins, the film producer affirmed that the company was co-owned by a major Atlanta rapper and actor, who was fined by the U.S. SEC in 2020.
The convict also told investors that the U.S. military had consented to distribute FLiK and that the platform was already concluding licensing deals with major studios. The DOJ stated that none of these claims stood true.
Felton persuaded investors that he was busily developing the platform and would use all the proceeds from the ICO sale to launch FLiK officially. Nonetheless, as soon as the ICO ended, he ditched the over 40 million FLiK coins he held, which induced the token’s value to descend, leaving investors with useless assets.
The Justice Department also indicated that instead of utilizing investor funds to develop FLiK as promised, the film producer shifted the proceeds from the token sale, worth around $2.4 million, to his personal account.
Felton used this money to finance his luxurious lifestyle, including a $1.5 million home, diamond jewelry, and a Ferrari, among other vehicles.
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Similar Crypto Scam
According to the DOJ, in 2018 Felton executed a similar scheme for a crypto exchange called CoinSpark. He made several false claims to lure investors to the Spark coin ICO.
The convict reasoned that investors would acquire 25% of the exchange’s profits in dividends and that a well-known accounting firm would audit CoinSpark’s finances every quarter.
As was the case with FLiK, none of the claims were correct. He raised over $200,000 in the ICO and thereafter told investors that CoinSpark would no longer be able to deliver the 25% promised, offering to refund their investments.
Regardless, Felton ignored investors’ demand for a refund and diverted the funds to his personal account.
Remarking on the case, Attorney Ryan K. Buchanan Mentioned: “The defendant used 21st-century technology to perpetrate an age-old fraud, lying to investors to steal their money and fund his own lavish lifestyle. Felton’s conviction should serve as a warning to anyone who seeks to capitalize on emerging technology to victimize others.”
Ryan Felton pleaded guilty to ten counts of money laundering, twelve counts of wire fraud, and two counts of securities fraud, which were added on the fourth day of his jury trial. His sentencing hearing is yet to be revealed.
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