The founder and chief executive of Trustify, the online platform connecting clients to a network of private investigators, has been charged with fraudulently offering and selling more than $18.5 million in securities to 90 corporate and individual investors.
Daniel Boice misrepresented Trustify as a fast-growing startup with thousands of investigators and robust revenues to corporate clients, according to the Securities and Exchange Commission (SEC), which announced parallel actions against Boice and the company recently.
The SEC said the Arlington, Virginia-based company falsely inflated its financial performance and the number of investigators it had on its roster, and then shut its doors when it was unable to pay its employees and vendors.
“As alleged in our complaint, Boice and Trustify lied to investors about their failing business to give the appearance of a thriving technology startup, while misappropriating investor funds to support an extravagant lifestyle,” said Kelly L. Gibson, Director of the SEC’s Philadelphia Regional Office.
“The scheme resulted in millions of dollars in investors losses, and the SEC will do all it can to hold the defendants accountable.”
The charges follow the news Trustify went bankrupt last year. Just two years prior the company moved into a plush new office and was heralded by the Virginia governor’s office for its plan to create 184 new jobs in Arlington.
The SEC seeks permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties from Boice. A former Trustify executive, Jennifer Mellon, Boice's wife, has also been charged by the SEC for receiving fraudulent funds.
One New York investment firm invested twice in Trustify. In 2017, it invested $4.75 million after receiving allegedly fraudulent financial statements. In 2018, it invested an additional $2 million in a “Series B” fundraising round after receiving emails that purported to confirm investments made by other banks. The confirmation email was actually sent by Boice, who used a fraudulent email handle to mimic another’s account, the Justice Department found.
Instead, the authorities said, Boice used about $8 million of funds support his and his then-wife’s own extravagant lifestyle. The money was allegedly used for private jet charters, vacations, a luxury car, jewelry, and mortgage payments. Another $500,000 also allegedly went to his own consulting company, GoLean DC.
Founded in 2015, Trustify, Inc. described itself the first technology platform to connect clients across the United States to the only nationwide network of highly trained, vetted private investigators. In 2016, Washington Business Journal named the company one of its Startups of the Week, and Trustify got a lot of attention for its forward-thinking business model.
But then the company stopped paying its bills and quickly disintegrated.
Virginia-based Private Investigator John Morse of Morse Investigation Services explained, “They had little to no desire to get in compliance, and they imploded from corporate culture that they bred. It’s as much about delivering client expectations as the final product, and I don't think they were successful at either.”
Private investigators overwhelmingly think PIs should be licensed, but some don’t know of any complaints against individual PIs.
Following a recent decision by Colorado Governor Jared Polis which effectively killed off licensing (see previous stories on this blog) in the state, Ross Investigators surveyed PIs across the country to learn their thoughts on licensing.
Licensing laws exist in all the states where PIs who responded to the survey conduct business. Most also said they thought PIs should be required to be licensed.
None knew of any moves in their states to follow Colorado’s lead and repeal licensing laws.
“Licensing protects the consumer and ensures that only licensed, insured, bonded and experience private investigators provide investigative services,” said one survey respondent.
“Licensing in and of itself does not guarantee competence,” said another respondent. “Proper licensing such as California has requiring 6,000 hours of compensated investigative experience to qualify for licensing (which) certainly goes a long way.”
Another said licenses maintain the professionalism and trustworthiness of the industry by ensuring all license holders have clean records and meet minimum experience requirements.
“However, the Colorado PI law was an absolute joke and there will be little difference without licensing.”
The survey asked PIs what they thought of Governor Polis’ statement that licenses rarely protect the public from harm and instead serve as a barrier for people trying to enter the industry to the benefit of incumbent license-holders.
Of the 22 PIs who responded, 12 said they “strongly disagreed” with the statement, five said they “disagreed,” two said they neither “agreed nor disagreed” and three said they “strongly agreed.”
The survey also asked PIs what they thought of the statement by the Professional Private Investigator Association of Colorado which said that without licenses consumers should beware because “background checks, surety bonds and demonstrating a knowledge of the laws" were no longer in place to protect them from unscrupulous private investigators.
Of the 22 PIs who responded, 16 said they “strongly agreed” with the statement, three said they “agreed,” one said they “disagreed” and two said they “strongly disagreed.”
Asked if they knew of any formal complaints against individual PIs in their states, 14 survey respondents said they did and six said they didn’t.
“One was a convicted arsonist who applied,” said one PI about a PI they knew of who’d been the subject of a complaint.
Another said: “(A) PI was illegally buying law enforcement information and selling it. Convicted and jailed.”
And another said: “Complaints in Arizona vary from PIs working outside of their scope to working security under the PI license.”
Jim Carrey (aka Ace Ventura) isn’t part of this story, but it does, ah, involve a famous pet detective.
Self-described “missing pet expert” Karin Tarqwyn is hot on the trail of Alexandra, a beloved support dog to a young woman in Iowa whose mother recently died.
Alexandra disappeared from her home in Sioux City just after noon on July 10, soon after being startled by a loud noise.
The adorable pet has been an emotional support for her owner, Josey Carroll, whose relatives say has been going through a tough time.
"Her father died in 2012. She had just turned 11-years-old. He had an aggressive lung cancer,” said Jamiee Beaubien, Josey's Aunt.
“And in April of this year, sadly her mom passed away. She's suffered so many losses now, she needs her dog home."
So the family has turned to Tarqwyn, who says she’s the most recognized pet expert in North America, to help locate Alexandra.
“Since 2005, she has worked full time assisting pet owners in the location and recovery of their missing pets,” says Tarqwyn’s website.
“Working with a team of pet detectives, Tarqwyn's focus is on missing and lost dogs and cats with a particular interest in the process and techniques necessary for the recovery of missing dogs that maybe shy, timid, aloof, reserved or skittish.”
On Wednesday, Tarqwyn and Alexandra’s family spent the entire day tracking the missing dog's scent in the Morningside area.
"It takes a village, especially for a situation like Alexandra,” Tarqwyn told Siouxland News.
“She is acting very feral right now, so she is not going to allow someone she does not know to approach, she may not even let her owners approach.
"Basically, it's gonna be someone saying 'I saw this dog,' we are either gonna get there with the family and hope that she will come to them. And sometimes, in recovery efforts, it requires trapping."
Tarqwyn says she'll continue to help the family until Alexandra is found.
As an expert on missing pets, Tarqwyn has appeared on CNN, Animal Planet, the Today Show, People, PBS and Dog Fancy.
In Ace Ventura: Pet Detective, Jim Carrey is tasked with finding the abducted dolphin mascot of the Miami Dolphins football team.
By Simon Crittle
A decision by Governor Jared Polis to veto a bill, which would have continued the requirement that private investigators in Colorado be licensed, has been met with anger by the bill’s proponents.
Issuing his veto, effectively killing off PI licensing, Governor Polis said "licensing rarely serves to protect the public from harm, and instead usually served incumbent license-holders as a barrier for entry for new competition including many retired officers of the peace.”
But under the headline, “Consumer BEWARE! Colorado now one of only 5 states that DO NOT require a PI to be licensed!” Andrea Orozco, president of the Professional Private Investigators Association of Colorado wrote, “Governor Polis with the swipe of a pen repealed licensing in Colorado.”
“Background checks, surety bonds and demonstrating a knowledge of the laws are no longer in place to protect the public, consumers and subjects of investigations.”
Rep. Jovan Melton, an Aurora Democrat and main sponsor of House Bill 1207 – Sunset Regulation of Private Investigators – said he thought the governor’s veto would hurt the state’s private investigator industry.
“I don’t think the governor made a good decision on this,” Melton told the Colorado Sun. “I think he chose to protect his staff over the people of Colorado.”
Melton was referring to staff working at the Department of Regulatory Agencies (DORA), which administers PI licensing and vehemently opposed the bill. Last year DORA issued a scathing report which said licensing in Colorado was unnecessary as complaints against PIs were “virtually non-existent.”
“That to me shows the program is working the way it should be,” Melton said.
Melton said not having a licensing regime in Colorado meant private investigators could find it difficult to get insured.
The governor’s veto ends Colorado’s 9-year-old PI licensing regime as his signature was needed to extend existing regulations for another five years.
In vetoing the bill, Governor Polis, who last year vetoed three other unrelated licensing bills, said “licensing is often not superior to other forms of consumer protection.”
“Too often it is used to protect existing professionals within an occupation against competition from newcomers entering that occupation,” said the governor in a letter explaining his reasoning.
"Licensing in the United States has at times prevented traditionally economically disadvantaged people from having the ability to access occupations."
Governor Polis noted that the PI licensing regime didn’t require continuing education or any “real test” of competency and instead required only an “open-book” jurisprudence exam.
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