The illustration shows a gold-plated commemorative coin of the cryptocurrency Tether (USDT) arranged next to a screen displaying a trading chart. (Photo by Justin Tallis/AFP via Getty Images)
SAN FRANCISCO (KRON) – A San Francisco man who defrauded investors with a cryptocurrency Ponzi scheme has been sentenced to years in prison and repaid millions of dollars, prosecutors announced Thursday.
A federal judge sentenced William Ko Ichioka, 30, to four years in prison for multiple felonies in connection with an investment fraud scheme involving cryptocurrencies and other investment vehicles.
“Ichioka lured his victims by falsely promising that they would quickly receive huge returns on their investments,” federal prosecutor Patrick Robbins said. “During the years he ran a cryptocurrency-based Ponzi scheme, Ichioka defrauded more than 100 investors out of tens of millions of dollars. Today’s ruling makes clear that long prison sentences await anyone who seeks to defraud investors.
Ichioka previously pleaded guilty to five charges – wire fraud, two counts of aiding and assisting in the preparation of a false or fraudulent tax return, committing fraud in connection with the purchase and sale of securities, and engaging in commodity fraud.
According to the plea agreement, beginning in 2018, Ichioka ran a scheme in which he fraudulently collected tens of millions of dollars from more than 100 victims.
Ichioka presented himself as a “self-made investor” with “a fortune worth millions” while soliciting investors, according to the U.S. Attorney’s Office. He promised that their money would be invested in various securities and/or commodities, including cryptocurrencies, cryptocurrency arbitrage, futures, derivatives, and foreign exchange transactions.
Ichioka started doing business under the name “Ichioka Ventures” in 2019 and told potential investors that they would receive 10% returns every 30 business days.
Ichioka admitted that instead of investing his victims’ money as promised, he instead mixed investors’ money with his own money and used the investors’ money to make personal purchases of luxury cars, watches, and jewelry. He also used the money to pay for his lavish lifestyle, investigators said.
Ichioka admitted that Ichioka Ventures suffered losses from portions of the money he had already invested, and the company actually made no money, the U.S. Attorney’s Office said.
“Ichioka convinced unsuspecting investors to pour money into his sham venture with false promises of legitimate profits. His deceptive financial scheme claimed the lives of more than 100 people, including his friends and family,” said Robert Tripp, FBI Special Agent in Charge.
Investigators discovered that Ichioka reimbursed existing investors with new investor funds to continue the scam. After his scheme was exposed, investigators said Ichioka owed non-family investors in Ichioka Ventures at least $21 million as a result of the scheme, in addition to owing his family members more than $40 million.
“Predatory financial schemes like Ichioka’s are neither victimless, nor evade justice as demonstrated by today’s ruling,” said IRS Criminal Investigative Acting Special Agent in Charge Michael Mosley.
U.S. District Judge Vince Chhabria will determine issues related to the response at a hearing scheduled for February 20.