SF resident sentenced to prison, fined $5 million for investment fraud
SAN FRANCISCO - A former San Francisco resident was sentenced to serve four years in prison for committing multiple felonies in connection with an investment fraud scheme involving cryptocurrencies, federal prosecutors said Thursday.
William Koo Ichioka, 30, was sentenced months after pleading guilty to five charges in July 2023, namely 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.
The U.S. Attorney's Office for the Northern District of California said Ichioka admitted that beginning in 2018, he operated a scheme by fraudulently raising tens of millions of dollars from over 100 persons and entities. Court documents found that he solicited investors by promising that their funds would be invested in various securities and commodities, including cryptocurrency, cryptocurrency arbitrage, futures, and derivatives, and foreign exchange currency transactions.
Under the name "Ichioka Ventures" in 2019, he coaxed victims to invest as they would earn a 10 percent return every 30 business days since his investment and trading activities are generating profits and capable of making these returns.
Ichioka created a website for "Ichioka Ventures" for victims to invest, view balances and investments, and view transaction history.
However, federal prosecutors said he used the investors' money, along with his funds, to purchase luxury items -- such as high-end vehicles, watches, and other jewelry -- and to fund his expenses which included his personal residence, restaurants, bars, grocery stores, taxi and car share rides, retail stores, gym membership fees, and online purchases.
Ichioka admitted that he and Ichioka Ventures did not earn 10% returns every 30 business days for his investors throughout the time that he said that it did. He sustained losses from portions of funds that he did invest and by the end of 2019, Ichioka had privately admitted that the "[c]ompany hasn't made any money since we started", without the knowledge of investors.
Federal prosecutors said Ichioka confessed to paying existing investors with new investor funds to further perpetuate the fraud, and that he owes non-family investors in "Ichioka Ventures" at least $21 million, and additionally owes his family members over $40 million due to the scheme.
According to the court filings describing his plea bargain, Ichioka concealed and hid the scheme by doctoring financial documents to falsely overstate the value of assets and providing fake documents to prospective investors. He also failed to provide tax documentation to investors and did not provide an income report to the IRS in this scheme.
Ichioka was charged with various counts of fraud in June 2023.
Besides his prison sentence, he was ordered to pay a $5 million fine and to serve five years of supervised release to begin after his prison term, according to the U.S. Attorney's Office.
Federal prosecutors said a hearing is scheduled for Feb. 20 to determine issues related to restitution.