Ryan Felton, 48, entered the plea on the fourth day of his jury trial in his hometown of Atlanta on Thursday.
“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. “Felton’s conviction should serve as a warning to anyone who seeks to capitalize on emerging technology to victimize others.”
Investigators said Felton, in 2017, promoted an initial coin offering, or ICO, for an entertainment streaming platform promising to surpass Netflix. Prosecutors said he falsely promoted that Atlanta rapper T.I. was co-owner of the FLiK platform, the U.S. military had agreed to distribute the platform to service members, and FLiK was finalizing licensing deals with major film and television studios.
Instead of using investor funds to develop the platform, Felton used around $2.4 million from investors to fund an extravagant lifestyle. He bought a $1.5 million home, a Ferrari, a Chevy Tahoe, and about $30,000 in diamond jewelry, the U.S. Attorney’s Office for the Northern District of Georgia said.
Felton promoted a second ICO for a new company in 2018. Investigators say he raised more than $200,000 for CoinSpark and again diverted money to his personal bank account.
“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,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “The FBI is committed to protecting investors from sophisticated cryptocurrency scammers that seek to capitalize on the novelty of digital currency.”
Felton pleaded guilty to 12 counts of wire fraud, 10 counts of money laundering, and two counts of securities fraud.
Sentencing will be scheduled at a later date before U.S. District Judge J.P. Boulee.