On Monday, the founder and chief executive officer of a now-defunct Silicon Valley technology company start-up known publicly as WrkRiot pleaded guilty for defrauding several of his company’s former employees by luring them to join his company based on false and misleading statements about his educational, professional and financial background, and by enticing them to continue working for his company through forged documents purportedly reflecting salary payments that were never made.
“In total, Choi collected hundreds of thousands of dollars from his own employees through false representations about the company’s financial health and his own ability to financially support WrkRiot in its early stages of development,” the indictment states.
As part of his guilty plea, 36-year-old Isaac Choi admitted that while attempting to recruit potential employees, he made false and misleading statements about various topics, including his educational and professional history, and the amount of his wealth. Choi admitted in his plea that, in truth, he never attended any business school, that he was never employed in any capacity by any financial institution, and that he exaggerated his wealth. He further admitted that in August 2016, while at WrkRiot’s office in Santa Clara, he emailed several of his employees fake wire transfer confirmation documents purporting to reflect their salary payments for the purpose of convincing his employees to continue working for his privately failing company.
The situation was first picked up by the press when former employee Penny Kim wrote a Medium post titled “I Got Scammed By A Silicon Valley Startup” on Aug. 18, 2016.
The startup folded in 2016 amid allegations it had burned through $700,000 in 10 months, the Silicon Valley Business Journal reported.
Pursuant to the plea agreement, Choi pleaded guilty to one count of wire fraud and the other charges were dismissed. He faces a maximum statutory penalty of 20 years imprisonment and a $250,000 fine or twice the gross gain or loss from the offense when he is sentenced May 24.