Former Silicon Valley CEO Pleads Guilty To Defrauding Employees Of Tech Company Start-Up

SAN FRANCISCO –  The founder and chief executive officer of a now-defunct Silicon Valley technology company start-up pleaded guilty today to wire fraud, announced Acting U.S. Attorney Alex G. Tse, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.  The Honorable Edward J. Davila, United States District Judge, accepted the guilty plea of Isaac Choi, aka Yi Suk Choi, Yisuk Choi, Yi Suk Chae, and Isaac Chae (Choi) this afternoon.

According to the plea agreement, Choi, 36, most recently of Orange County and previously of Santa Clara, Calif., was founder and chief executive officer of a company known publicly as WrkRiot.  As part of his guilty plea, 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.

On June 1, 2017, a federal grand jury indicted Choi charging him with five counts of wire fraud, in violation of 18 U.S.C. § 1343.  Pursuant to today’s plea agreement, Choi pleaded guilty to one count and the remaining charges will be dismissed.  

Choi faces a maximum statutory penalty of 20 years’ imprisonment and a $250,000 fine or twice the gross gain or loss from the offense.  Judge Davila also may order an additional period of supervised release.  However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.   

Judge Davila scheduled Choi’s sentencing for May 24, 2018.

Assistant U.S. Attorney Jeff Schenk and Trial Attorney Cory E. Jacobs of the Criminal Division’s Fraud Section are prosecuting the case.  This case was investigated by the FBI’s San Jose Resident Agency.