San Francisco CEO Sentenced To 3 Years For Fraud

San Francisco CA

16 December, 2021

9:17 PM

Description

SAN FRANCISCO, CA — A San Francisco CEO was sentenced to three years in prison after pleading guilty to wire, bank, and securities fraud, the U.S. Attorney's Office for the Northern District of California announced Wednesday. Andrew Chapin, 33, of San Francisco, was also ordered to pay $8 million in restitution to his victims, according to the district attorney's news release. Chapin was the founder and CEO of Benja, Inc., a digital advertising company that specialized in placing digital advertisements for overstocked goods that allowed shoppers to purchase products from the advertisement itself, rather than being redirected to another website. From June 2019 through September 2020, Chapin told creditors and prospective investors that Benja generated $6.2 million and $13.2 million in 2018 and 2019, respectively, and had signed large contracts with numerous well-known national sportswear companies. Chapin admitted in a plea agreement that these statements were false. He admitted that he had no contracts with these companies, and even arranged for people to impersonate employees from the corporations to pretend that contracts had been signed. He also admitted to repeatedly submitting false information about Benja to a bank to obtain a $5 million credit line. He used the money to pay off creditors, personal credit cards, and put money into a personal cryptocurrency exchange account. These falsified records allowed to obtain millions of dollars from venture capital and investment firms, according to the district attorney press release. In a memo filed for sentencing, prosecutors tallied total losses from Chapin's frauds to be $8,069,900.