The Department of Justice indicated Titanium Blockchain Infrastructure Services Inc. (TBIS) CEO and founder Michael Alan Stollery has been sentenced for his role in an alleged cryptocurrency fraud scheme.
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Stollery, 54, was sentenced to four years and three months in prison for his alleged role involving TBIS’s initial coin offering (ICO) that raised approximately $21 million from investors in the United States and overseas.
Per 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, via a series of false and misleading statements.
Additionally, according to court documents, although required to do so, Stollery did not register the ICO regarding TBIS’s cryptocurrency investment offering with the U.S. Securities and Exchange Commission (SEC), nor did he have a valid exemption from the SEC’s registration requirements.
To entice investors, Stollery falsified aspects of TBIS’s white papers, purportedly offering investors and prospective investors an explanation of the cryptocurrency investment offering that included the purpose and technology behind the offering, how the offering was different from other cryptocurrency opportunities, and the prospects for the offering’s profitability.
Stollery 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.
Stollery 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, which included credit card payments and the payment of bills for his Hawaii condominium – authorities alleged.
Trial Attorneys Tian Huang and Andrew Tyler of the Criminal Division’s Fraud Section prosecuted the case.
