Buzz, fraud, TC

Former startup CEO indicted for allegedly defrauding employees

Following allegations of the now-defunct job search startupWrkRiot scamming employees out of wages and its CEO Isaac Choi of misleading former employees about his credentials, the U.S. Department of Justice has announced that Choi has been indicted on charges of five counts of wire fraud.

Choi allegedly lured several of WrkRiot’s former employees to work for him based on “false and misleading statements about his educational, professional and financial background, and by allegedly enticing them to continue working for his company by providing them with forged documents purportedly reflecting payments for unpaid stories,” the Department of Justice wrote in its announcement.

The indictment alleges that Choi lied about his degree from business school, his time spent working as an analyst at a major financial institution, was financially well-off, and was investing his personal wealth into the company. After employees found out that WrkRiot’s bank accounts didn’t have the money Choi said he had invested, Choi lied and said that a lot of the money he said he would invest was tied up in accounts overseas, the indictment alleges.

Last August, the startup made its Facebook page private after former employee Penny Kim accused the company of scamming her out of wages and then firing her in retaliation. That month, Choi had allegedly sent emails to WrkRiot’s employees saying that their salaries were on the way, and attached documents that appeared to show he had made wire transfers to their accounts.

“In reality, as alleged in the indictment, Choi sent forged wire transfer confirmations in order to induce WrkRiot employees to continue working for the company without being paid,” the DOJ’s announcement says.

As noted in the announcement, an indictment is simply an allegation, and Choi is presumed innocent until proven otherwise.

Featured Image: Bryce Durbin/TechCrunch

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