SEC charges online marketplace Trustify Inc. with $18.5 million fraud

The Securities and Exchange Commission (SEC) charged online marketplace Trustify Inc. and its founder and CEO Daniel Boice with fraudulently offering and selling more than $18.5 million of securities to over 90 corporate and individual investors.

The SEC alleges that from 2015 to 2018 Trustify and Boice falsely presented Trustify as a successful startup with lucrative corporate clients, thousands of investigators in its network and growing revenues. According to SEC’s complaint, Trustify’s number of investigators and revenue were far lower than what they represented and the company was unable to pay its employees and vendors and ultimately ceased operations.

Boice allegedly misappropriated around $8 million of investor funds for personal expenses for himself and his then-wife, also a Trustify executive, including private jet charters, vacations, a luxury car, jewelry and mortgage payments.  Boice also diverted hundreds of thousands of dollars to his supposed consulting company GoLean DC LLC.

Online marketplace Trustify Inc. and its founder charged in $18.5 million fraud

Kelly L. Gibson, Director of the SEC’s Philadelphia Regional Office commented:

As alleged in our complaint, Boice and Trustify lied to investors about their failing business to give the appearance of a thriving technology startup, while misappropriating investor funds to support an extravagant lifestyle. The scheme resulted in millions of dollars in investors losses, and the SEC will do all it can to hold the defendants accountable.

The SEC charges Boice and Trustify with fraud and seeks permanent injunctive relief, disgorgement with prejudgment interest and civil penalties.  The agency also named GoLean and former Trustify executive Jennifer Mellon as relief defendants, seeking the return of proceeds of the fraud to which they had no legitimate claim.

Additionally, the US Attorney’s Office for the Eastern District of Virginia and the Fraud Section of the US Department of Justice announced bringing criminal charges against Daniel Boice for wire fraud, securities fraud and money laundering.

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