The United States Department of Justice (DOJ) disclosed on Thursday that Ryan Felton, a 48-year-old film producer, pleaded guilty to the promotion of two fraudulent cryptocurrency schemes that led to the loss of millions of dollars.
Atlanta Film Producer Pleads Guilty to Crypto Fraud
According to the DOJ announcement, the Atlanta filmmaker pleaded guilty to deceiving investors into investing in two separate crypto entities, CoinSpark and FLiK, in 2017 and 2018, respectively, during their Initial Coin Offerings (ICO).
The convict advertised FLiK as an entertainment streaming platform and launched CoinSpark as an exchange where investors could trade cryptocurrencies.
The case, which was investigated by the U.S. Federal Bureau of Investigation (FBI) and the Securities and Exchange Commission (SEC), revealed that Felton manipulated the price of the assets by constantly showing false representations and material omissions of the assets before and after the ICO.
The report noted that the filmmaker convinced investors that their funds would be used to develop the platforms and for future upgrades. To further promote the entities, Felton posed as an investor hiding under fake identities on several social media platforms to lure more investors onto the platform.
Shortly after the conclusion of the ICO, the convict transferred the assets to other legit exchanges and sold them without returning investors’ funds, sending exactly $2.4 million of funds belonging to investors to his account. He also dumped over 40 million FLiK tokens on trading platforms, causing a significant drop in the token’s price.
According to the report, Felton used the funds generated from deceit to fund his extravagant personal lifestyle, including a cash purchase of a $1.5 million home and a $180,000 red 2007 Ferrari 599 GTB Fiorano Coupe.
“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,” said Attorney Ryan K. Buchanan.
Chris Hacker, Special Agent in Charge of the FBI Atlanta Division, stated that the convict deceived investors into believing that their money would be used to fund the innovative platforms. However, every penny generated from the scheme enriched the filmmaker’s pocket.
“It is a sad reminder to investors to be very careful where they entrust their money, but also a reminder to anyone motivated by greed that the FBI and our federal partners are committed to holding them accountable for their actions,” he said.
Meanwhile, the case, which has been in court since Friday, September 2020, concluded with 12 counts of wire fraud, ten counts of money laundering, and two counts of securities fraud.
The report noted that sentencing would be scheduled later before the U.S. District Court Judge J.P. Boulee.