AriseBank Cryptocurrency Scamming CEO Pleads Guilty of Deception in $4M Fraud Case
The AriseBank CEO, who faced up to 120 years in jail, entered a guilty plea for a count of securities fraud that implicates him for deceiving investors of AriseBank when he was at its helm. This according to a recent report from Dallas News.
Confessed To His Wrongdoing
Jared Rice, according to a Texas-based news outlet Dallas News defrauded victims of more than $4.2 million by promising them guaranteed “no-risk-returns” of between 10 and 20 percent on all the investments they made on his startup. The CEO also claimed that the startup’s initial coin offering (ICO) netted $600 million in a few weeks when they had only collected $4 million.
As per the report, Rice was arrested by the FBI over securities and wire fraud in November 2018, and sub confessed to his wrongdoing; according to a statement by the United States Attorney for the Northern District of Texas, Erin Nealy Cox. According to the charge, Rise allegedly told his customers that AriseBank was capable of offering them:
“FDIC-insured accounts and traditional banking services, including Visa-brand credit and debit cards, in addition to cryptocurrency services.”
Faces Up To 20 Years in Federal Prison
Rice is also accused of failing to disclose to investors that he had pleaded guilty to state felony charges to another internet-based business he was involved in earlier. When he was arrested, he was indicted on three counts, and reports suggested he could face up to 120 years in prison for the crimes. However, following statements of his plea officials believe that Rice, who is due for sentencing on July 11, could now face up to 20 years in federal prison.
AriseBank, during its heyday, had its website claim that it was “the first decentralized bank to offer the first and largest cryptocurrency banking platform in the world,” and said its software could allow users to “serve as their own bank.”
The startup further added its legitimacy claims by saying it was in the process of acquiring KFMC Bank Holding Company and TPMG — neither of which could be found on banking databases. Celebrities also endorsed the startup. The startup promised never to hold cryptocurrency funds but would instead give its customers the “people the freedom to hold, send, receive, buy, sell and spend cryptocurrency directly from their computer or mobile device.”
Promised Investors Heaven but Failed To Deliver
As BTCmanager reported in December 2018, the long arm of the law finally caught up with the founders of AriseBank following a lengthy court battle that began in January 2018.
The Founder of the now-defunct AriseBank collaborated with COO, Stanley Ford, and others to organize cryptocurrency-based fundraiser during the 2017 ICO craze and promised investors heaven which they failed to deliver.
Thankfully, the fraud-prone ICO fundraising model has lost its glamor and is now being replaced by the more secure Initial Exchange Offering (IEO) model as spearheaded by Binance, Bittrex and Huobi exchanges.