Titanium Blockchain CEO sentenced to 4 years in prison for $21m crypto scam
He did not use the invested money as promised but instead commingled the ICO investors’ funds with his personal funds, using at least a portion of the offering proceeds for expenses unrelated to TBIS, such as credit card payments and the payment of bills for his Hawaii condominium.
Michael Alan Stollery, the CEO and founder of Titanium Blockchain Infrastructure Services Inc. (TBIS) was sentenced to four years and three months in prison for his role in a cryptocurrency fraud scheme involving TBIS’s initial coin offering (ICO) that raised approximately $21 million from investors in the United States and overseas.
He was facing up to 20 years in prison.
According to court documents, Stollery touted TBIS as a cryptocurrency investment opportunity, luring investors to purchase “BARs,” the cryptocurrency token or coin offered by TBIS’s ICO, through a series of false and misleading statements.
He also did not register the ICO with the U.S. Securities and Exchange Commission (SEC), nor did he have a valid exemption from the SEC’s registration requirements.
Stollery enticed investors with falsified aspects of TBIS’s white papers, which purportedly offered investors and prospective investors an explanation of the cryptocurrency investment offering, including the purpose and technology behind the offering, how the offering was different from other cryptocurrency opportunities, and the prospects for the offering’s profitability.
In addition, he planted fake client testimonials on TBIS’s website and falsely claimed that he had business relationships with the Federal Reserve and dozens of prominent companies to create the false appearance of legitimacy.
He did not use the invested money as promised but instead commingled the ICO investors’ funds with his personal funds, using at least a portion of the offering proceeds for expenses unrelated to TBIS, such as credit card payments and the payment of bills for his Hawaii condominium.
Last year, Stollery’s attorney Andrew Holmes told the Wall Street Journal that his client had legitimate intentions in launching his business but succumbed to “overexuberance that went beyond what he should’ve done”. According to the lawyer, Stollery was “very remorseful” and he wanted to get as much money as possible back to those that put their money in.
