Guam businessman pleads guilty to $61M Ponzi scheme, faces 71 years in federal prison

A Guam businessman, who previously was acclaimed by his Tumon alma mater for becoming a multimillionaire at age 23, has pleaded guilty in the U.S. District Court in San Francisco to a host of financial crimes in a Ponzi scheme that has taken $61 million from investors.

“Today, the United States announced the filing of an information charging William Koo Ichioka with multiple felonies in connection with ‘Ichioka Ventures,’ an alleged investment fraud scheme involving cryptocurrencies and other investment vehicles,” a news release from the U.S. Attorney’s Office for the Northern District of California states. “According to court documents filed in the case, Ichioka has agreed to plead guilty to charges of wire fraud, aiding or assisting in the preparation of a false or fraudulent tax return, fraud in connection with the purchase and sale of securities, and commodities fraud.”

Mr. Ichioka’s plea agreement remains under seal, a possible indication of his cooperation with federal law enforcement against others. Had he been convicted at trial, he faced up to 71 years in prison.

On the same day of the news release, the federal court released a proposed civil judgment signed by Mr. Ichioka with the U.S. Securities and Exchange Commission. According to the proposed judgment, he is permanently barred from issuing, purchasing, offering, or selling any securities, except for his personal account. Neither can any company of which he is an officer.

According to the state of Hawaii’s Business Registration Division, William Koo Ichioka is one of two officers in City Hill Co. (Hawaii) Ltd. This family-owned establishment is comprised of The Guam Plaza Resort & Spa, JP Superstore, Nana’s Café, Sails BBQ, Tarza Water Theme Park, Rootz Hill’s Grill House, Cafe at Rootz Hill, Kumukumu Coconut Bar, Tarzana Restaurant, and Kahida Multipurpose Space, according to its website.

According to the SEC judgment, Mr. Ichioka must pay back the proceeds of which he illegally benefitted to his victims.

Scheme: Ichioka took people’s money to fund lavish lifestyle

According to the original charges against him, he began soliciting and accepting funds from prospective investors in 2016, identifying himself as a self-employed investor and financial advisor. Several of Mr. Ichioka’s social media accounts from that period also show these titles.

He fraudulently raised tens of millions of dollars from more than 100 people and entities between 2018 and May 2022, according to the indictment.

“As part of the scheme to defraud, Ichioka falsely represented to prospective investors that he would invest their money in various securities and/or commodities, including digital assets such as cryptocurrencies, to induce their investments,” the indictment states. “In truth and in fact, and as Ichioka well knew, Ichioka did not invest significant portions of the investor funds entrusted to him. Instead of using investors’ funds as promised, Ichioka commingled investor money with his own funds and embezzled investor money to fund his own personal expenses … and to make purchases of luxury items.”

Examples in the indictment of personal expenses:

• Rent for his personal residence
• Restaurants and bars
• Grocery stores
• Taxi or car share rides
• Retail stores
• Gym membership fees; and
• Online purchases, “among other things.”

Examples in the indictment of luxury items:

• Watches and other jewelry
• Luxury vehicles

Mr. Ichioka’s Facebook page is littered with posts displaying what appear to be many of these purchases, including a watch valued in the hundreds of thousands of dollars, a private jet, a Rolls Royce Phantom, and a video in which he describes a personal New York home of 9,000 square feet of living space.

Along with bank accounts and digital wallets, federal officials seized 22 luxury watches from his lavish New York apartment, including three Patek Philippe watches, two Jacob & Co. watches, and several Rolex watches. Some of the watches were diamond studded.

According to the indictment, part of the scheme included Mr. Ichioka’s promise to investors their investments would earn 10 percent returns every 30 business days. In 2019, he began doing business under Ichioka Ventures, a Delaware-based limited liability company, and created a login-only website, www.ichiokaventures.com, where the investors could monitor their investments and transactions.

“In truth and in fact, and as Ichioka well knew, Ichioka and Ichioka Ventures did not actually earn 10 percent returns every 30 business days for its investors. Rather, he and Ichioka Ventures sustained losses from portions of funds that he did invest. For instance, Ichioka privately acknowledged at the end of 2019–unbeknownst to investors–that the ‘company hasn’t made any money since we started.’ Ichioka never told investors this fact.”

Doctored documents, falsified bank statements, prepared false tax return, wired money to personal accounts

Mr. Ichioka doctored financial documents “to falsely overstate the value of assets, including bank, brokerage, and cryptocurrency exchange materials,” according to the indictment. For example, Ichioka was accused of falsifying a “proof of funds” letter that purported he possessed 1200 BitCoin valued at $10.8 million, when in reality he only possessed 18, valued at $150,000.

According to the indictment, he paid investors who would cash out with money from new investors.

“The allure of using cryptocurrencies to make massive profits in a short timeframe provides fertile ground for fraudsters to take advantage of unwary victims,” said Abraham Simmons, a spokesperson from the Office of the U.S. Attorney. “The information filed in this case alleges Ichioka convinced victims to invest millions of dollars into his phony venture by claiming he was making legitimate profits when, in fact, he was reporting fake results and creating bogus documents.”

“William Ichioka was able to secure millions from investors by telling them lie after lie,” said FBI Special Agent in Charge Robert Tripp. “His ‘miraculous’ rates of return, however, were illusory. He stole from family, friends, and others to fund his lavish lifestyle while sustaining his deceit through investment repayments. The charges filed today are an important step to bring justice for Ichioka’s victims.”

In another instance, Mr. Ichioka falsified a Bank of America statement in order to show investors that account had $1.5 million, when in reality only $200,000 was in that account at the time, according to the indictment.

“Ichioka presented fabricated statements of accounts to investors, including via investor account updates on the Ichioka Ventures website, divorced from the actual performance or value of invested funds with Ichioka,” the indictment states.

He also willfully failed to report the funds he received from embezzling investor funds to the Internal Revenue Service, according to the indictment.

The indictment also details several wire transfers of investor funds to his personal accounts; funds he used for the purchase of luxury items, personal rent, credit card payments, and other personal expenses.

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All the photos above were taken from Mr. Ichioka’s personal Facebook page.