Titanium Blockchain CEO faces up to 20 years for $21m crypto fraud scam
Michael Alan Stollery, the former CEO and founder of Titanium Blockchain Infrastructure Services (TBIS) has pleaded guilty for his role in a cryptocurrency fraud scheme.
TBIS launched an initial coin offering (ICO) that raised approximately $21 million from investors in the United States and overseas, and not only the firm did not register the securities offering with the SEC, but the CEO falsified white papers, planted fake testimonials, and instead of using the funds as promised, he used the money for personal expenses, according to his own admission.
Stollery faces up to 20 years in prison after pleading guilty to one count of securities fraud. He is scheduled to be sentenced on November 18.
The former chief executive touted TBIS as a cryptocurrency investment opportunity, luring investors to purchase its native token BAR via initial coin offering. His series of false and misleading statements were aimed at convincing investors and prospective investors that the purpose and technology behind the offering was sound and that it was different from other cryptocurrency opportunities.
The firm’s website falsely claimed that Stollerye had business relationships with the Federal Reserve and dozens of prominent companies to create the false appearance of legitimacy.
Michael Stollery then used at least a portion of the funds raised through the ICO for expenses unrelated to TBIS, such as credit card payments and the payment of bills for Stollery’s Hawaii condominium.
My Big Coin founder convicted for $6m scam
The CFTC has recently announced that My Big Coin founder Randall Crater was convicted for his $6 million fraud. The token was marketed as a fully functioning cryptocurrency backed by $300 million in gold, oil, and other valuable assets.
Randall Crater also falsely told investors that My Big Coin had a partnership with MasterCard and that the token could readily be exchanged for government-backed paper currency or other virtual currencies.
None of these claims were true and Randall Crater misappropriated over $6 million of investor funds for his own personal gain, including spending hundreds of thousands of dollars on antiques, artwork, and jewelry, the CFTC found.
The scheme operated from 2014 to 2017, the CFTC filed commodity fraud charges against Crater and My Big Coin in January 2018, as well as civil charges against CEO John Roche and two of Crater’s associates Mark Gillespie and Michael Kruger.
The jury found Crater to be guilty of four counts of wire fraud, which carries a maximum statutory penalty of up to 20 years in prison for each count, and three counts of money laundering, which carries a maximum statutory penalty of up to 10 years in prison for each count. He is scheduled to be sentenced on October. 27, 2022.