(U.S. Attorney’s Office for the Northern District of California)–William Koo Ichioka was sentenced to serve four years in prison and ordered to pay a $5 million fine for committing multiple felonies in connection with an investment fraud scheme involving cryptocurrencies and other investment vehicles. The sentence was handed down by the Hon. Vince Chhabria, United States District Judge.
Ichioka, 30, formerly of San Francisco and New York, 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 commodities fraud—on July 12, 2023. According to his plea agreement, beginning in 2018, Ichioka operated a scheme in which he fraudulently raised tens of millions of dollars from over 100 persons and entities. Court documents describe how Ichioka held himself out as “self-made investor” with a “multimillion fortune” as he solicited investors by promising that their funds would be invested in various securities and/or commodities, including cryptocurrency, and cryptocurrency arbitrage, futures, and derivatives, and foreign exchange currency transactions. Ichioka began doing business under the name “Ichioka Ventures” in 2019 and represented to prospective investors that they would earn 10% returns every 30 business days, and that his investment and trading activities actually had been generating or had the ability to generate returns in excess of these amounts. Further, Ichioka created a website for Ichioka Ventures that allowed investors to create and login to accounts to invest, view balances and investments, and view transaction history.
Ichioka admitted that, rather than invest his victims’ money as he promised, he instead commingled investor money with his own funds and used investor money to make purchases of luxury items (including luxury vehicles, watches, and other jewelry) and to fund his own personal expenses. Such personal expenses included his personal residence, restaurants and bars, grocery stores, taxi and car share rides, retail stores, gym membership fees, and online purchases. Moreover, Ichioka admitted that he and Ichioka Ventures did not actually earn 10% returns every 30 business days for his investors throughout the time that he represented that it did. Rather, he and Ichioka Ventures sustained losses from portions of funds that he did invest. Court documents describe that by the end of 2019—unbeknownst to investors—Ichioka had privately acknowledged that the “[c]ompany hasn’t made any money since we started.”
“Ichioka lured his victims by falsely promising they would receive huge returns quickly on their investments,” said First Assistant United States Attorney Patrick Robbins. “During the years that he ran his cryptocurrency-based Ponzi scheme, Ichioka managed to defraud more than 100 investors of tens of millions of dollars. Today’s sentence illustrates that lengthy prison terms await all those who seek to swindle investors in this district.”
“Ichioka convinced unsuspecting investors to pour money into his bogus venture with false promises of legitimate profits. His deceitful financial scheme victimized more than 100 people, including his friends and family. I hope that today’s sentence brings them some measure of justice,” said FBI Special Agent in Charge Robert Tripp. “The FBI and our law enforcement partners will continue to pursue criminals who choose to commit financial fraud and hold them accountable for their crimes.”
“Predatory financial schemes like Ichioka’s are not victimless, nor do they escape justice as evidenced by today’s sentencing,” said IRS Criminal Investigation Acting Special Agent in Charge Michael Mosley of the Oakland Field Office. “IRS CI Oakland Field Office Special Agents and investigative staff in conjunction with our federal law enforcement partners follow the money, and as a result, deliver cases that lead to just outcomes.”
Ichioka admitted that he repaid existing investors with new investor funds to further perpetuate the fraud. Further, Ichioka agreed that he owes non-family investors in “Ichioka Ventures” at least $21 million as a result of the scheme, and additionally owes his family members over $40 million.
Ichioka also admitted that he concealed and hid the scheme by doctoring financial documents to falsely overstate the value of assets (including bank, brokerage, and cryptocurrency exchange materials) and providing doctored documents to prospective investors, according to court filings describing Ichioka’s agreement to plead guilty. Ichioka also presented false statements of account to investors via the Ichioka Ventures website, failed to provide tax documentation to investors, and willfully failed to report income to the Internal Revenue Service in this scheme.
On June 22, 2023, Ichioka was charged in an Information with one count of wire fraud, in violation of 18 U.S.C. § 1343; two counts of aiding or assisting in the preparation of a false or fraudulent tax return, in violation of 26 U.S.C. § 7206(2); one count of securities fraud, in violation of 15 U.S.C. §§ 78j(b), 78ff; 17 C.F.R. § 240.10b-5; and one count of commodities fraud, in violation of 18 U.S.C. § 1348. Ichioka pleaded guilty to all five counts.
In addition to the prison term and fine, Judge Chhabria also ordered Ichioka to serve five years of supervised release to begin after his prison term. A hearing is scheduled for February 20, 2024, before Judge Chhabria to determine issues related to restitution.
The case is being prosecuted by Assistant United States Attorneys Eric Cheng and Benjamin Kingsley with assistance from Megan Pagaduan. The prosecution is the result of an investigation by the FBI and IRS-Criminal Investigation. The U.S. Attorney’s Office and the federal law enforcement agencies also thank the San Francisco Regional Office of the Securities and Exchange Commission and the Commodity Futures Trading Commission, both of whom conducted separate parallel investigations into the defendant’s conduct.
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The article below was published on Kandit on June 28, 2023:
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.
All the photos above were taken from Mr. Ichioka’s personal Facebook page.
