Atlanta film producer pleads guilty to cryptocurrency-based investment scams
ATLANTA, Ga. (CBS46) - An Atlanta film producer has pleaded guilty to $2.5 million in cryptocurrency-based investment scams.
The Department of Justice says Ryan Felton, 48, of Atlanta, pled guilty to multiple counts of wire fraud, securities fraud, and money laundering charges from his fraudulent promotion of two cryptocurrency investment schemes that cost investors millions in losses.
According to U.S. Attorney Buchanan, the indictment, and other information presented in court: In 2017, Felton promoted an initial coin offering (ICO) for a new entertainment streaming platform, FLiK, which he promised would surpass Netflix. ICOs are fundraising events during which the issuers of a unique cryptocurrency “token” or “coin” set an amount they want to raise, offer it to the public in a crowd sale, and receive cryptocurrency from investors in exchange.
In order to increase the price of FLiK coins, Felton falsely represented to investors that a prominent Atlanta rapper and actor was a co-owner of FLiK, the United States military had agreed to distribute the streaming platform to service members, and FLiK was finalizing licensing deals with major film and television studios. In reality, the rapper had no role in the company beyond authorizing a promotional social media post, FLiK had no military contract, and Felton never had discussions with any studio about licensing content.
Instead of using investor funds to develop the platform, Felton diverted approximately $2.4 million in investor proceeds from the ICO and trading markets to his personal account. He used the vast majority of the investor proceeds to fund his extravagant lifestyle, including all-cash purchases of a $1.5 million residence, a $180,000 red 2007 Ferrari 599 GTB Fioran Coupe, a new $58,250 Chevy Tahoe, and approximately $30,000 in diamond jewelry.
In 2018, Felton promoted a second ICO for a new company, CoinSpark, which was a cryptocurrency trading exchange, attracting investors with the promise that they would receive 25% of the trading exchange’s profits in the form of dividends. He also posed as a potential investor, using fake names on various internet forums and social media sites to further promote false information and build up excitement in CoinSpark.
After raising more than $200,000 in the ICO, Felton announced that CoinSpark would not pay Spark investors a dividend and offered ICO investors a refund. Felton then repeatedly rejected or ignored investor requests for refunds. Instead, Felton again diverted significant funds to his personal bank account.
Felton pleaded guilty to twelve counts of wire fraud, ten counts of money laundering, and two counts of securities fraud during his jury trial. His sentencing will be scheduled at a later date.
This case is being investigated by the Federal Bureau of Investigation.
Copyright 2022 WGCL. All rights reserved.