Titanium Blockchain CEO Pleads Guilty to Fraud in $21M Scheme
LOS ANGELES, Calif. — A cryptocurrency CEO pleaded guilty to fraud Friday, according to a statement from the Department of Justice.
Michael Alan Stollery, 54, of Reseda, California, was the CEO of Titanium Blockchain Infrastructure Services Inc. TBIS raised $21 million from investors in the U.S. and overseas for the “BARs,” the cryptocurrency token or coin offered by TBIS’ Initial Coin Offering, using false and misleading statements.
According to the DOJ, Stollery did not register the ICO with the Securities and Exchange Commission nor did he have a valid exemption from the SEC’s registration requirements.
Stollery admitted that he falsified documents to prove his company’s legitimacy, according to the DOJ. That included falsifying the company’s white papers that were supposed to show “investors and prospective investors an explanation of the cryptocurrency investment offering, including the purpose and technology behind the offering,” according to the department.
There were also fake testimonials on the website and Stollery made false claims about having connections to the Federal Reserve and other large companies, according to the department.
He admitted to using some of the money his company received for non-business-related expenses including paying off credit cards and his mortgage for his Hawaii condominium, according to the department.
He pleaded guilty to one count of securities fraud in the U.S. District Court in Los Angeles.
He is set to be sentenced on Nov. 18 and could face up to 20 years in prison for his one count of securities fraud.
Stoller’s guilty plea comes at a time when cryptocurrency scams are quickly becoming the most prevalent kind of fraud, according to a June report from the Federal Trade Commission.
Investment-related fraud is the most common, and Americans have lost $575 million because of “bogus investment opportunities” since 2021, according to the report.
Cryptocurrencies have become popular with scammers, particularly when they are getting people to pay up, the FTC warns. That’s because if someone pays for something in a cryptocurrency they do not have the same legal protections as credit and debit cards, the commission says in its guidance.