The United States Attorney’s Office for the Northern District of Georgia announced on Thursday that Atlanta-based filmmaker Ryan Felton, 48, pleaded guilty to 12 counts of wire fraud, 10 counts of money laundering, and 2 counts of securities fraud that stemmed from two cryptocurrency-based investment scams.
“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,” United States Attorney Ryan K. Buchanan said.
Felton funneled $2.4 million of investor funds to his personal bank account rather than use the ICO proceeds to develop his new entertainment platform, FLiK, which he asserted would “surpass Netflix.”
“Felton’s conviction should serve as a warning to anyone who seeks to capitalize on emerging technology to victimize others,” Buchanan said.
Felton lied to his investors and pumped the price of FLiK coins, his cryptocurrency, by the false assertions that the United States military agreed to distribute FLiK to its service members, rapper T.I. was a co-owner of the company, and the platform was about to finalize deals with Hollywood.
“The technology has advanced, but the crime remains the same, and those who invest in cryptocurrency must be wary of opportunities that appear too good to be true,” FBI Atlanta Special Agent in Charge Keri Farley said.
Felton bought a $1.5 million house, a $180,000 2007 Ferrari 599 GTB Fiorano Coupe, a $58,250 Chevy Tahoe, $30,000 in jewelry, and paid for them all in cash.
Initial coin offerings (ICO) can be used to fund innovative and exciting projects that might not otherwise be able to come to life through traditional funding sources,” U.S. Attorney Byung J. “BJay” Pak said at the time of Felton’s indictment.
Felton’s other ICO fraud scheme was a cryptocurrency trading exchange company called CoinSpark, for which he promised investors 25% of trading exchange profits.
In reality, he siphoned the funds to his personal bank account and did not respond to customer refund requests.
The Securities and Exchange Commission (SEC) announced charges against Felton, rapper T.I. and three other individuals at the time of Felton’s indictment in 2020.
T.I. was required to pay a $75,000 civil monetary penalty and is not allowed to partake in the sale or offering of digital-asset securities for five years.
Felton was the only member of the group who did not agree to pay a settlement in order to resolve the SEC charges against him.
Felton will be sentenced by U.S. District Court Judge J.P. Boulee at a later date yet to be determined.
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