Titanium Blockchain CEO Pleads Guilty in $21 Million Crypto Fraud Scheme
Michael Alan Stollery, 54, of Reseda, California, the CEO and founder of Titanium Blockchain Infrastructure Services Inc. (TBIS), pleaded guilty Friday in the Central District of California for his role in a cryptocurrency fraud scheme involving TBIS’s initial coin offering (ICO) that raised approximately $21 million from investors in the United States and overseas.
According to court documents, Stollery touted TBIS as a cryptocurrency investment opportunity, luring investors to purchase “BARs,” the cryptocurrency token or coin offered by TBIS’s ICO, through a series of false and misleading statements. Although he was required to do so, Stollery did not register the ICO regarding TBIS’s cryptocurrency investment offering with the U.S. Securities and Exchange Commission (SEC), nor did he have a valid exemption from the SEC’s registration requirements.
Stollery admitted that, to entice investors, he falsified aspects of TBIS’s white papers, which purportedly offered investors and prospective investors an explanation of the cryptocurrency investment offering, including the purpose and technology behind the offering, how the offering was different from other cryptocurrency opportunities, and the prospects for the offering’s profitability. Stollery also planted fake client testimonials on TBIS’s website and falsely claimed that he had business relationships with the Federal Reserve and dozens of prominent companies to create the false appearance of legitimacy.
Stollery further admitted that he did not use the invested money as promised but instead commingled the ICO investors’ funds with his personal funds, using at least a portion of the offering proceeds for expenses unrelated to TBIS, such as credit card payments and the payment of bills for Stollery’s Hawaii condominium.
Stollery pleaded guilty to one count of securities fraud. He is scheduled to be sentenced on November 18 and faces up to 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI’s Los Angeles Field Office and the Federal Reserve Board’s OIG Western Region San Francisco Office are investigating the case. Fraud Section Trial Attorneys Kevin Lowell, Tian Huang, and Andrew Tyler are prosecuting the case.
Titanium Blockchain CEO Michael Alan Stollery pleaded guilty to securities fraud in a scheme that swindled $21 million from investors. The 54-year-old Reseda, California resident faces up to 20 years in prison and is set to be sentenced on November 18.
Stollery, the founder of Titanium Blockchain Infrastructure Services Inc. (TBIS), was required to register the ICO with the U.S. Securities and Exchange Commission (SEC) but failed to do so. He also made false claims about business relationships with the Federal Reserve and prominent companies.
The case highlights the need for investors to be cautious when investing in cryptocurrency schemes, especially those that promise unusually high returns with little risk.
Investors who believe they have been victimized by Stollery’s scheme are encouraged to contact the FBI’s Los Angeles Field Office or the Federal Reserve Board’s OIG Western Region San Francisco Office.
Key Facts
- State: California
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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