Ryan Felton, an Atlanta-based film producer, entered a guilty plea to accusations that he stole more than $2.5 million from cryptocurrency investors while operating a scheme using cryptocurrencies.
The film producer, who was charged in the US for his involvement in the cryptocurrency ventures Flik and CoinSpark, is currently being tried by a jury and reportedly entered a guilty plea four days into the trial.
As per a news release from the US Department of Justice, Felton is accused of various crimes, including wire fraud, securities fraud, and money laundering.
ICO scam from 2017
In the press announcement, US Attorney Ryan K. Buchanan stated that Felton’s deceptive scam began in 2017 amid the heyday of initial coin offerings.
The producer is accused of using the widespread interest in cryptocurrency at the time to advertise an ICO for FLiK and misleading unwary victims into believing the project would compete with and even topple the streaming giant Netflix.
Felton erroneously claimed that FLiK was a co-owner of a well-known US rapper and actress, which sparked intense interest in the coin’s public auction.
Additionally, he misrepresented the existence of FLiK’s distribution deal with the US military and content licensing deal with a major Hollywood studio. Then, after defrauding investors of almost $2.4 million from FLiK, he transferred more money to his account through CoinSpark, another cryptocurrency exchange that had garnered more than $200,000 from investors.
Funds used to support “Extravagant Lifestyle”
According to the indictment, Felton used the funds to support his “extravagant lifestyle,” which included purchasing a $1.5 million home with cash. He also spent $180,000 on a 2007 Ferrari 599 GTB, $58,250 on a Chevy Tahoe, and $30,000 on diamond jewelry.
According to Buchanan:
“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.”
He thinks Felton’s conviction will deter other people who might look for similar ways to extort money from investors.
“Felton’s conviction should serve as a warning to anyone who seeks to capitalize on emerging technology to victimize others.”
FBI Special Agent Keri Farley warned investors to be wary of crypto investment opportunities which appear to be too good.
“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. The FBI is committed to protecting investors from sophisticated cryptocurrency scammers that seek to capitalize on the novelty of digital currency”
According to the DOJ’s news statement, Felton, 48, is waiting for his sentence.