Former CEO and Founder of Tech Start-Up Sentenced for $18 Million Investment Fraud Scheme
For Immediate Release
U.S. Attorney's Office, Eastern District of Virginia
ALEXANDRIA, Va. – The CEO and co-founder of Trustify Inc., a privately-held technology start-up company that connected customers with private investigators, was sentenced to over eight years in prison today for conducting a fraudulent scheme that led to the company’s collapse and resulted in over $18 million in losses to more than 250 individual and corporate investors.
“By spinning an elaborate web of lies, Boice fraudulently induced victims to invest over $18 million in his company so that he could misappropriate millions of those dollars to fund his lavish lifestyle and personal aggrandizement,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “This case demonstrates that we will hold corporate executives accountable when they cast aside their fiduciary duties for personal financial gain.”
According to court documents, beginning in 2015, Daniel Boice, 41, of Alexandria, fraudulently solicited investments in Trustify, an Arlington-based company that Boice promoted as the “Uber” of private investigator services. Boice raised more than $18 million from over 250 individual and corporate investors by, among other things, falsely overstating Trustify’s financial performance. To secure investor capital, Boice inflated Trustify’s monthly and annual revenues in detailed fraudulent financial statements and investor presentations, and he fabricated large corporate business relationships to support his false statements about Trustify’s growth. In addition, Boice created a fake email account to pose as a prominent potential investor, and he then used the account to send a fraudulent email to successfully convince an investment firm to invest nearly $2 million in Trustify.
Boice also made false statements to investors about the amount of investor funds that he would personally receive, while diverting a substantial amount of the investor money to his own benefit. Boice personally derived at least $3.7 million in proceeds from the fraud, including several million dollars in transfers from Trustify to bank accounts under his control and in personal charges on credit cards paid with Trustify funds. Boice diverted Trustify funds, for example, to secure the down payment on a $1.6 million house in Alexandria and a $1 million beach house in New Jersey, as well as to pay for a chauffeur, house manager, and various luxury items. Boice also used Trustify funds to pay for family vacations, private jet trips, and over $100,000 for premium seats at sporting events.
In 2019, faced with declining revenues and the consequences of Boice’s diversion of company assets for his personal expenditures, Trustify was placed into corporate receivership by the Delaware Chancery Court. The company’s collapse led to over $18 million in losses to investors and over $250,000 in unpaid wages and associated costs for Trustify’s employees.
Boice was sentenced today to 97 months in prison, followed by three years of supervised release. In addition, he was ordered to pay $18,131,742.21 in restitution and $3.7 million in forfeiture.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia, and James A. Dawson, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division, made the announcement after sentencing by Senior U.S. District Judge T.S. Ellis, III.
Acting U.S. Attorney Parekh also commended the Philadelphia Regional Office of the Securities and Exchange Commission and the Virginia State Corporation Commission, which conducted a parallel civil investigation of Boice and Trustify.
Assistant U.S. Attorney Russell L. Carlberg and Trial Attorney Blake Goebel of the Justice Department’s Fraud Section prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:20-cr-167.
Updated March 26, 2021
Securities, Commodities, & Investment Fraud