Atlanta film producer pleads guilty in multi-million cryptocurrency scheme: DOJ

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The 48-year-old is accused of racking in millions between two separate schemes.

ATLANTA — An Atlanta film producer has pleaded guilty to wire fraud and money laundering charges after prosecutors said he promoted cryptocurrency investment schemes that cost investors thousands.

The man is accused of promoting an initial coin offering (ICO) for a new entertainment streaming platform FLiK, which he claimed would surpass Netflix in 2017. Prosecutors explained ICOs are fundraising events where issuers of a cryptocurrency set a fundraising amount, offer it to the public in a crowd sale, and receive cryptocurrency from investors in exchange.

To pump the price of FLiK coins, the 48-year-old falsely represented to investors that a prominent Atlanta rapper and actor was a co-owner of the currency, and said the United States military has also agreed to distribute the streaming platform, court records read, adding FLiK was finalizing licensing deals with major studios. Prosecutors said each of these claims was a lie.

Instead of using investor funds to develop FLiK, the film producer diverted around $2.4 million to his personal account, prosecutors allege. He used the payout to buy a Ferrari, a $1.5-million home, diamond jewelry, among other vehicles.

“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,” U.S. Attorney Ryan K. Buchanan said in a news release.

The man conducted a similar scheme in 2018, this time for a cryptocurrency trading exchange CoinSpark. When investors demanded a refund, the man never returned their money. He raised $200,000 in the heist, lawyers said, adding a significant portion of those funds were diverted to his personal account.

Twelve counts have been filed against the man. He’s facing charges of wire fraud, money laundering, and securities fraud, which were added on the fourth day of his jury trial, records show. His sentencing hearing has not been scheduled.

“(His) conviction should serve as a warning to anyone who seeks to capitalize on emerging technology to victimize others,” Buchanan said.

The FBI is also investigating.

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