The news was announced Wednesday by the U.S. Attorney’s Office of the Northern District of Texas, which states that 30-year-old Jared Rice Sr. tricked hundreds of investors out of over $4 million and has now been charged with three counts of securities fraud and three counts of wire fraud.
Rice allegedly lied to prospective investors, claiming that the firm, which he called the “first decentralized banking platform,” would offer FDIC-insured bank accounts and Visa-linked debit and credit cards, in addition to crypto services based on its own AriseCoin token.
However, in reality, AriseBank wasn’t authorized to conduct banking services in Texas, was not FDIC insured, and had no partnership with Visa, the Justice Department states.
Rice is also accused of lying about raising “$600 million within just a few weeks” through an initial coin offering (ICO). Moreover, he spent investors’ money for his own personal use on hotels, food and clothing and more.
After the firm’s formation, he began promoting AriseBank and AriseCoin around June 2017 through press releases, public video interviews, social media outlets and his own websites, according to a court document unsealed Wednesday.
If convicted, Rice faces up to 120 years in federal prison, the Attorney’s Office said.
Erin Nealy Cox, the U.S. Attorney for the Northern District of Texas, said:
“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.”