Jared Rice, Sr., Securities Fraud, Texas 2019

A former cryptocurrency CEO has been sentenced to five years in federal prison for his role in a $4 million scheme to dupe investors out of their money.

Jared Rice, Sr., the inventor of cryptocurrency AriseCoin, was sentenced in the Northern District of Texas on Wednesday by U.S. District Judge Ed Kinkeade. The court ordered him to pay $4,258,073 in restitution.

Rice, 33, admitted to lying to potential investors about AriseBank, a cryptocurrency-based banking platform. He claimed that the platform could offer consumers FDIC-insured accounts and traditional banking services, including Visa-brand credit cards, in addition to cryptocurrency services.

However, the reality was starkly different. AriseBank had not been authorized to conduct banking in Texas, was not FDIC insured, and did not have any partnership with Visa.

As Rice touted the benefits of AriseBank, he secretly 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 pleaded guilty to state felony charges in connection with a prior internet-related business scheme.

The Federal Bureau of Investigation's Dallas Field Office conducted the investigation. Assistant U.S. Attorneys Mary Walters, Sid Mody, and Erica Hilliard prosecuted the case.

Rice pleaded guilty to one count of securities fraud in March 2019. The scheme saw hundreds of investors buy approximately $4,250,000 in AriseCoin using digital currencies like Bitcoin, Ethereum, and Litecoin, as well as fiat currency.

Source: https://www.justice.gov/usao-ndtx/pr/cryptocurrency-ceo-sentenced-five-years-4-million-crypto-scheme