AriseBank CEO arrested by FBI over $4M scam

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Another scammer targeting the cryptocurrency space has been taken out. In a press release by the U.S. Department of Justice (DOJ) from last Wednesday, the agency announced that the Federal Bureau of Investigation (FBI) has arrested the co-founder of a crypto platform following his indictment on charges that resulted in millions of dollars in losses to a number of investors.

30-year-old Jared Rice Sr., co-founder of AriseBank, is accused of scamming investors out of more than $4 million, enticing them to invest in the “first decentralized banking platform” in the U.S. According to authorities, Rice concocted a story that the institution would offer bank accounts insured by the FDIC (Federal Deposit Insurance Corporation), as well as credit and debit cards backed by Visa. He also claimed that he had raised “$600 million within just a few weeks” through an initial coin offering (ICO). Unfortunately, everything he said was a lie.

None of the money he collected was used for its stated purpose. Instead, Rice used it to buy clothes, eat in fancy restaurants and take luxury vacations, investigators said.

Rice has been charged with three counts of wire fraud and three counts of securities fraud. The U.S. Attorney for the Northern District of Texas, Erin Nealy Cox, asserts, “My office is committed to enforcing the rule of law in the cryptocurrency space. The Northern District of Texas will not tolerate this sort of flagrant deception – online or off.”

This isn’t the first time that regulators have had a run-in with Rice. This past January, he, along with the company’s co-founder, Stanley Ford, was sued by the U.S. Securities and Exchange Commission (SEC) for fraud and unlawfully issuing securities. He was also served with a cease-and-desist order from the Texas Department of Banking in relation to his activities. The SEC has also indicated, in February, that he had been on probation after being indicted in 2015 for charges related to theft and tampering with government records. A separate felony indictment also hangs over the crook in Dallas County, Texas for assault.

Rice’s next trip will be to a court to find out if he is to be convicted on all charges. If that happens, he could be sentenced to up to 120 years in federal prison.