(HedgeCo.Net) The Securities and Exchange Commission has charged Trustify Inc., an online marketplace purportedly designed to connect customers to a network of private investigators, and its founder and CEO Daniel Boice with fraudulently offering and selling over $18.5 million of securities to more than 90 corporate and individual investors.
The SEC’s complaint, filed in federal court in the Eastern District of Virginia, alleges that between 2015 and 2018, Trustify and Boice falsely held Trustify out as a successful startup with lucrative corporate clients, thousands of investigators in its network, and growing revenues. According to the complaint, however, Trustify’s number of investigators and revenue were far lower than represented and the company was unable to pay its employees and vendors and effectively ceased operations. Boice allegedly misappropriated at least $8 million of investor funds to pay 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 allegedly diverted hundreds of thousands of dollars to his purported consulting company GoLean DC LLC.
“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,” said Kelly L. Gibson, Director of the SEC’s Philadelphia Regional Office. “The scheme resulted in millions of dollars in investors losses, and the SEC will do all it can to hold the defendants accountable.”
The complaint charges Boice and Trustify with violating the antifraud provisions of the federal securities laws and seeks permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties. The Commission 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.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of Virginia and the Fraud Section of the U.S. Department of Justice today announced the filing of criminal charges against Daniel Boice for wire fraud, securities fraud, and money laundering.