Trustify founder Danny Boice has been charged with fraud and money laundering

Trustify founder and former CEO Danny Boice has been charged with fraud and money laundering by the Department of Justice.

The department is alleging that he ran a “fraud scheme resulting in millions of dollars of losses to investors.” Boice was officially charged with five counts of wire fraud, one count of securities fraud and two counts of money laundering, the DOJ announced last Friday.

“Boice allegedly raised approximately $18.5 million from over 90 investors by, among other things, falsely overstating Trustify’s financial performance,” the Justice Department wrote in a statement. “The indictment also alleges that Boice 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.”

Founded in 2015, now-defunct Trustify created an app that connects users to private investigators. Boice came up with the idea for the company after he went through a divorce and wanted to keep tabs on his children. Trustify formerly occupied an office space in Arlington, Virginia, that has now been taken over by the Amazon ecommerce service provider Amify.

Though the indictment doesn’t list any of the names of investors or entities involved in the case, the DOJ described instances in which Boice allegedly acted in an unlawful manor to convince investors to keep funding Trustify. One of those instances alleges that Boice falsely told an investor in 2016 that Trustify was earning $500,000 each month in revenue when it was actually “earning far less.” The indictment is also alleging that Boice used investor funds for his own personal benefit.

Read the full indictment here.

These charges being brought against Boice following the company’s bankruptcy in 2018. A court wasn’t able to locate any viable assets remaining for Trustify at the time, but did find that large sums of funds were withdrawn from the company via wire transfers and deposited into accounts linked to Boice and Jennifer Mellon, former Trustify president and Boice’s wife at the time, the Washington Business Journal reported.

The indictment states that if Boice is found guilty, he would be expected to forfeit $7.4 million.

The DOJ reported that the FBI Washington Field Office is further investigating the case. U.S. Securities and Exchange Commission is also filing a civil complaint against Boice for related conduct.

This isn’t the first time Boice and Trustify have been under fire: Last January, eight former employees of the company sued Boice and Trustify for unpaid wages. In March 2019, Boice took to Medium to disparage Anchorage Capital, blaming Trustify’s downfall on the investor.

“I have put every single dime I have into Trustify,” he wrote. “Including our life savings and my children’s college funds. I am currently in the process of filing bankruptcy as I haven’t received a dime of compensation from Trustify in nearly 12 months in addition to putting far more into the company than I ever received in compensation of any kind. Despite all of this I find myself named personally in a lawsuit from Anchorage casting the widest of nets related to frivolous and easily disputed claims and a slew of generally personal attacks that they know are just not accurate.”

Trustify also got backlash on social media in 2015 when it reached out to the email addresses of people who were outed by the Ashley Madison hack for marketing purposes.