Trustify CEO charged with defrauding investors

SEC says CEO spent $8M on jet charters, vacations, luxury car, jewelry

Published July 27, 2020 by Richard Foster

Daniel Boice, CEO and founder of Arlington-based tech startup Trustify Inc., was charged by federal prosecutors Monday with fraud and money laundering charges related to a scheme to defraud investors of $18.5 million. In a parallel action, the Securities and Exchange Commission also charged Trustify Inc. and Boice with violating the antifraud provisions of the federal securities law.

In an indictment unsealed Monday, Boice was was charged with five counts of wire fraud, one count of securities fraud and two counts of money laundering. FBI officials and U.S. Attorney for the Eastern District of Virginia G. Zachary Terwiliger allege in the indictment that Boice fraudulently solicited $18.5 million from more than 90 investors in his company, which connected customers with private investigators, by falsely overstating Trustify’s financial performance. The indictment states that Boice also lied to investors about how much money he would receive from the investment funds and that he diverted a substantial amount of the money for his own benefit.

According to the SEC complaint, Trustify and Boice falsely claimed it had lucrative corporate clients, thousands of investigators in its network and growing revenues, but in actuality it was unable to pay its employees or vendors and had effectively ceased operations. According to the SCC, Boice used at least $8 million in funds from investors to charter private jets and buy vacations, a luxury car and jewelry and make mortgage payments. He also allegedly diverted payments to his purported consulting company, GoLean DC LLC.

The SEC is seeking permanent injunctive relief and civil penalties from Trustify and Boice, as well as repaying defrauded investors with interest.

“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.”