LA-Based Crypto CEO Pleads Guilty to $21M Fraud
Photo by Kanchanara on Unsplash

LA-Based Crypto CEO Pleads Guilty to $21M Fraud

In a 2018 initial offering of his company’s BAR cryptocurrency, Titanium Blockchain CEO Michael Alan Stollery managed to raise $21 million—a successful launch by any measure. On Monday, the 54-year-old Reseda resident pleaded guilty to a single count of securities fraud in the U.S. District Court in L.A. Stollery could face decades in prison.

According to the Dept. of Justice (DOJ), Stollery, A.K.A. Michael Stollaire, bamboozled investors into buying Titanium’s BAR cryptocurrency with “false and misleading statements,” in addition to not registering BAR with the Securities and Exchange Commission (SEC).

Stollery admitted that in efforts to “entice investors, he falsified aspects of TBIS’s white papers, which purportedly offered investors and prospective investors an explanation of the cryptocurrency investment offering,” according to the DOJ.

The faked white papers were just one element of a fairly complex scheme. Stollery used “fake client testimonials” and made false claims of having “business relationships with the Federal Reserve and dozens of prominent companies to create the false appearance of legitimacy,” the DOJ said. Stollery even copped to using investor money for personal expenses, including credit card payments and paying bills for his condo in Hawaii.

The SEC first stopped Titanium Blockchain's initial coin offering—or ICO—with an emergency order in 2018, which froze the firm’s assets and placed them into receivership. The SEC alleged at the time that, in addition to everything else, Stollery was untruthful about his relationships with the Federal Reserve and big-name companies, including PayPal, Verizon, Boeing and Disney.

Stollery’s attorney Andrew Holmes told the Wall Street Journal that his client had legitimate intentions in launching his business but succumbed to “overexuberance that went beyond what he should’ve done.” Holmes said Stollery was “very remorseful and he wants to get as much money as possible back to those that put their money in.”

Andrew Holmes did not immediately respond to dot.LA’s request for further comment about the case.

Fraud is an ongoing problem in cryptocurrency and NFTs and governments worldwide are working to keep up with policing what is essentially a kind of digital Wild West. According to the FTC, investors lost $1 billion to common scams like “rug pulls”—heavily promoting tokens to drive up their price before selling, taking all the invested fiat currency in the process—between 2021 and the first half of 2022 alone.

Stollery is scheduled for sentencing on November 18. He could face up to 20 years in prison.

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