Federal Prosecutors And Agencies Charge Fund Founder Over Misappropriating $25M For Digital Asset Trading

The Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the United States Attorney’s Office for the Northern District of California filed charges against the investment fund founder of Ichioka Ventures, William K. Ichioka, of New York, New York, with several cryptocurrency fraud schemes.

According to a June 22, 2023 press release, the SEC charged Ichioka with violating the antifraud provisions of the federal securities laws.

The SEC complaint states that Ichioka raised US$25 million from individual investors primarily in California and Oregon, making false claims about his investing success, and promising large anticipated returns.

The SEC’s complaint further alleges that from at least June 2019 to October 2021, Ichioka solicited investments for his unregistered investment fund, claiming that he was an accomplished investor, promising investors oversized returns, and guaranteeing investors’ principal. Ichioka agreed to the entry of a partial final judgement, subject to court approval.

In a typical Ponzi scheme-styled fraud, Ichioka promised attractive returns and used money from new investors to repay other investors. As per the SEC complaint, Ichioka falsified a bank statement and other documents to create an appearance of success, and also misappropriated investors’ funds for personal use.

“As we allege in our complaint, Ichioka lured investors by falsely stating that he was a self-made multimillionaire investor able to generate significant investment returns, but the real story was that Ichioka stole investor funds to enrich himself,” said Monique C. Winkler, Director, SEC’s San Francisco Regional Office.

In a June 22, 2023 press release, the Commodity Futures Trading Commission also filed a civil enforcement action charging William Koo Ichioka with fraudulently soliciting and misappropriating investors’ funds. Ichioka did not contest his liability on the CFTC’s claims.

According to the CFTC press release, Ichioka operated a fraudulent scheme from 2018 through November 2021, where he solicited funds from several individuals for trading digital asset commodities and for forex transactions.

On June 22, 2023, the United States Attorney’s Office for the Northern District of California also filed a criminal complaint against Ichioka charging him with multiple criminal counts including wire fraud and assisting in the preparation of a fraudulent tax return.

As per the court filings, Ichioka is further charged in connection with the purchase and sale of securities, and commodities fraud. Ichioka’s initial federal court appearance is yet to be scheduled.

The above concurrent charges against Ichioka further add to the debate of oversight over crypto activities and regulation in the United States and the collaboration of law enforcement agencies.

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