A Utah businessman, Braden John Karony, who was previously named ‘CEO of the Year’ by Utah Business in 2022, has been arrested for his alleged involvement in misappropriating millions of dollars of investors’ funds. The arrest was made on Wednesday in Provo, Utah. Karony, along with two other executives from the crypto technology company SafeMoon, has been charged with several fraud-related offenses.
The U.S. Attorney’s Office unsealed an indictment this week, revealing that the defendants deliberately misled investors and diverted funds for personal gain. The indictment alleges that the suspects used the misappropriated funds to purchase luxury vehicles, real estate, and other personal assets, including a custom Porsche sports car.
SafeMoon is a crypto technology company that launched its digital assets, known as SFM tokens, in 2021. Within months of its launch, SFM gained over one million holders and had a market capitalization exceeding $8 billion, according to federal prosecutors.
The fraudulent scheme involved “locked” liquidity pools, which were intended to increase automatically through a mandatory tax on SFM transactions. However, the defendants allegedly accessed these liquidity pools and diverted millions of SFM tokens for their personal benefit, contrary to what they had communicated to SFM investors.
The charges against the three suspects include conspiracy to commit securities fraud, conspiracy to commit wire fraud, and money laundering conspiracy. The arrested individuals, Braden John Karony and Thomas Smith, are in custody, while the third suspect, Kyle Nagy, remains at large.
The U.S. Attorney for the Eastern District of New York, Breon Peace, stated that the defendants’ actions amounted to theft, as they misled investors and used their funds for personal gain. IRS-CI Special Agent-in-Charge Tom Fattorusso emphasized the complexity of the fraud scheme but highlighted the ultimate result as theft.