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Date: 03-25-2019

Case Style:

United States of America v. Jared Rice, Sr.

Case Number: 3:18-cr-00587-K

Judge: Michael Kawi-FPD

Court: United States District Court for the Northern District of Texas (Dallas County)

Plaintiff's Attorney: Mary Walters and Sid Mody

Defendant's Attorney:

Description:




Dallas, TX - Cryptocurrency CEO Pleads Guilty to Securities Fraud in $4 Million Crypto Scheme

The inventor of cryptocurrency AriseCoin pleaded guilty to duping investors out of more than $4 million.

AriseBank CEO Jared Rice, Sr. – who settled a civil action involving AriseCoin filed by the SEC’s Fort Worth regional office last year – pleaded guilty to one count of securities fraud. His plea makes this case one of the first in which an individual has pleaded guilty to securities fraud involving a cryptocurrency in U.S. federal court.

According to his plea papers, Mr. Rice, 30, admits he lied to would-be investors, claiming that AriseBank – billed as the world’s “first decentralized banking platform” based on the proprietary digital currency AriseCoin – could offer consumers FDIC-insured accounts and traditional banking services, including Visa-brand credit cards, in addition to cryptocurrency services. In actuality, AriseBank had not been authorized to conduct banking in Texas, was not FDIC insured, and did not have any sort of partnership with Visa.

Even as he touted AriseBank’s nonexistent benefits, Mr. Rice quietly converted investor funds for his own personal use, spending the money on hotels, food, transportation, a family law attorney, and even a guardian ad litem – facts he failed to disclose to investors. He also failed to disclose that he’d plead guilty to state felony charges in connection with a prior internet-related business scheme.

Meanwhile, hundreds of investors bought approximately $4,250,000 in AriseCoin using digital currencies like Bitcoin, Ethereum, and Litecoin, as well as fiat currency.

“I’m proud of the Northern District of Texas’ innovative work enforcing the rule of law in the cryptocurrency space,” said U.S. Attorney Nealy Cox. “We will not tolerate flagrant deception of investors – virtual or otherwise.”

Statutorily, Mr. Rice faces 0 to 20 years in federal prison.

The Federal Bureau of Investigations conducted the investigation.


charges:


15 USC § 78j(b) and 78ff and 17 CFR § 240.10b-5 Securities Fraud
(1)
15 USC § 78j(b) and 78ff and 17 CFR § 240.10b-5 Securities Fraud
(2-3)
18 US

Outcome: 03/14/2019 27 PLEA AGREEMENT as to Jared Rice, Sr (Walters-DOJ, Mary) (Entered: 03/14/2019)
03/14/2019 28 Factual Resume as to Jared Rice, Sr (Walters-DOJ, Mary) (Entered: 03/14/2019)
03/14/2019 30 ELECTRONIC ORDER as to Jared Rice, Sr: Rearraignment Hearing is hereby set for 3/20/2019 at 02:00 PM before Magistrate Judge Renee Harris Toliver. (Ordered by Judge Ed Kinkeade on 3/14/2019) (chmb) (Entered: 03/14/2019)
03/20/2019 31 ELECTRONIC Minute Entry for proceedings held before Magistrate Judge Renee Harris Toliver: Rearraignment Hearing as to Jared Rice, Sr held on 3/20/2019. Plea entered by Jared Rice Sr (1) Guilty Count 1 of the Indictment. Location interval set to: LC. Attorney Appearances: AUSA - Mary Walters; Defense - Michael Kawi. (No exhibits) Time in Court - :20. (Court Reporter: Digital File) (Interpreter N/A.) (USPO N/A.) (mcrd) (Entered: 03/20/2019)
03/20/2019 32 Sentencing Scheduling Order as to Jared Rice, Sr: Presentence Investigation Report due by 5/29/2019. Objections to Presentence Investigation Report due by 6/12/2019. Presentence Investigation Addendum due by 6/26/2019. Objections to Presentence Investigation Addendum due by 7/10/2019. Sentencing set for 7/17/2019 09:30 AM before Judge Ed Kinkeade. (Ordered by Judge Ed Kinkeade on 3/20/2019) (ykp) (Entered: 03/20/2019)
03/20/2019 33 NOTICE/CONSENT REGARDING ENTRY OF A PLEA OF GUILTY as to Jared Rice, Sr (ykp) (Entered: 03/21/2019)
03/20/2019 34 Report and Recommendation on Guilty Plea as to Jared Rice, Sr. Re: 33 Consent Regarding Entry of a Plea of Guilty. (Ordered by Magistrate Judge Renee Harris Toliver on 3/20/2019) (ykp) (Entered: 03/21/2019)

Plaintiff's Experts:

Defendant's Experts:

Comments:



 
 
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