The founder of crypto bank AriseBank, Jared Rice Sr., pleaded guilty to one count of securities fraud in a Federal Court back in March. AriseBank CEO admits to his part in $42 million securities fraud.
It was reported by The Dallas News that Rice, who was previously indicted for fraud, admitted to scamming $4.2 million from shareholders. He accomplished this through selling AriseCoin tokens. Also, promising customers that Federal Deposit Insurance Corporation (FDIC) would give them Visa credit cards or accounts. Rice accepted both crypto and fiat during his ICO, even though neither the cards nor the FDIC accounts existed. The U.S. Securities and Exchange Commission (SEC) halted the ICO in January 2018.
Rice and the U.S. government have agreed that the defendant should spend 60 months in prison, according to his plea agreement. The charges he faces are:
- a maximum sentence of 20 years
- a $5 million fine
- three years’ supervised release
- restitution and forfeiture
The plea deal will go through when federal judge Ed Kinkeade signs off on the 60-month sentence. Ed Kinkeade is a federal judge of the U.S. District Court, Northern District of Texas,.
The U.S. Attorney’s Office in the Northern District of Texas charged Rice with three counts of securities fraud and three counts of wire fraud last November. After the charges ,FBI arrested him.
Rice has already paid $2.7 million in disgorgement, in order to settle a civil charge with the SEC, as well as roughly an additional $190,000 in penalties. Stanley Ford, Rice’s former Chief Operating Officer, was given an identical monetary fine when he faced similar charges.
Both have agreed to lifetime bans from serving as officers or directors of public companies, despite neither admitting to, nor denying the SEC’s charges. They also agreed to lifetime bans from participating in digital securities offerings.