Sunday, December 2, 2018

FBI Arrests Crypto Bank CEO Who Embezzled ICO Funds


fbi bitcoin crypto

Well, that escalated slowly.

The CEO of “AriseBank,” who CCN previously reported as the target of an SEC injunction and civil proceedings in January, was arrested by the FBI this week without incident on charges of fraud to the tune of around $4 million, according to a press release from the Department of Justice. The arrest comes on the heels of a California US District judge giving some resistance to an SEC request for an injunction against another ICO against which it has a civil suit.

The actions of 30-year-old Jared Rice Sr. are particularly egregious in contrast to those of Reginald Buddy Ringgold III, in that he is alleged to have actually gone on a spending spree even while his unregistered and unregulated security offering was in progress. As DOJ tells it:

“Even as he touted AriseBank’s nonexistent benefits in press releases and online, Mr. Rice quietly converted investor funds for his own personal use, spending the money on hotels, food, clothing, a family law attorney, and even a guardian ad litem.”

A History of Scamming and Domestic Violence

According to public records and the Grand Jury indictment, Jared Rice was previously charged with tampering with government records in Texas for forging the Secretary of State’s seal and signature on incorporation documents. In the same case, which dates back to 2015 and was related to another attempted internet venture, Rice was charged with stealing – in that case, investor funds. This would have been something an ICO reviewer might have come across with any degree of research.

To add a bit of TMZ-style flair to his case, Rice decided to use some of the proceeds of the AriseBank scam to fund his family attorney and a guardian ad litem, which are items related to his apparent domestic problems. In the photo to the right, he is under arrest and held on $15,000 bond for assault on a family member. The domestic violence arrest appears to have been after the charge of defrauding the previous investor, who is not named in the Grand Jury indictment document nor is immediately apparent in other methods of inquiry.

It seems that in all his spending, he did not think to pay to scrub his arrest records, not even with the prospect of millions of dollars more.

The case brings to mind the much more successful scamming of crypto mining executive Josh Garza, who was eventually sentenced to federal prison.

Here is the full indictment:

Jared Rice Indictment by on Scribd

Featured Image from Shutterstock

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