Another Trustify Lawsuit – Anchorage Capital VS Trustify and Danny Boice

Another Trustify Lawsuit and big trouble for Danny Boice and Jen Mellon as this suit alleges fraud and embezzlement among other charges.

Some highlights:

2. Anchorage has sound reason to believe that its substantial investment in Trustify is being squandered and its rights as a stockholder are being materially, irrevocably, and adversely affected through Trustify’s abandoning of its business and through the fraudulent and negligent actions of Trustify’s Chief Executive Officer, Daniel K. Boice (“Boice”), and its other officers (Cranky Not: Jen Mellon, you are an other officer a VP, a “Co-founder” and a board member).

3. In May 2017, Anchorage purchased 2,408,599 shares of Trustify’s Series A Preferred Stock at a price of $1.9721 per share, for an aggregate investment of $4,749,998.09.

5. Moreover, a number of Trustify’s board members have suddenly resigned and one has even retained separate counsel, Trustify’s corporate headquarters have been shuttered and abandoned, and Anchorage has uncovered malfeasance, mismanagement, breaches of fiduciary duty, and fraud relating to the funds received by Trustify as part of its stock offerings into which Anchorage has invested.

13. The majority of Trustify’s board members also resigned during this same time, including Boice’s co-founder and wife, Jennifer Mellon. While Trustify’s investors were able to communicate with the other known board member, Timothy Gentry, Mr. Gentry was unable to procure legitimate and verified information from Boice or access Trustify’s records,

14. Even this superficial access abruptly ended, however, when Anchorage was informed that Mr. Gentry had suddenly resigned from Trustify’s board and retained counsel. This was especially shocking as Mr. Gentry had also been one of Trustify’s earliest investors.

15. Anchorage also became aware of two lawsuits recently filed against Boice and Trustify, one of which was filed by Trustify employees and alleged (among other things) that Trustify had failed to pay its employees for the month of November 2018 and that Boice commingled and utilized Trustify’s funds for his personal use.

6. Anchorage further received independent confirmation—from its own sources and from another Trustify investor—that documentation existed establishing that Boice commingled and utilized Trustify’s funds for purely personal use, including annual transfers totaling at least $750,000 from Trustify’s accounts into a limited liability company that Boice created and maintained for his personal use.

25. As months went by without notice that the Series B round had met its minimum target for funding, Anchorage inquired regarding when and whether the round would close, and regarding the status and location of the $1,957,500.48 that Anchorage had wired to Trustify but for which it still had not received any stock.

26. Instead of receiving substantive responses, Boice made Trustify effectively “go dark,” evading and outright ignoring Anchorage’s repeated requests for information regarding the Series B round and Trustify’s general business and financial health.

32. Subsequent to the Virginia lawsuit’s commencement, Anchorage received independent documentation indicating that Boice has commingled and utilized Trustify’s funds for purely personal use. Anchorage was also informed by a principal of another entity invested in Trustify-Sovereign’s Capital-that it was in possession of emails from Trustify’s chief of staff which showed that Boice annually transferred $750,000 from Trustify’s accounts into a limited liability company that Boice created and maintained for his personal use.

33. Sovereign’s Capital also informed Anchorage that Boice had provided Sovereign’s Capital with certain copies of Trustify’s bank statements that had either been completely fabricated or had been “doctored” to show an inflated amount of funds in the account.

40. Anchorage has engaged Robert W. Seiden, Esq. to be the proposed appointed custodian/receiver for Trustify based on his strong, relevant experience. Mr. Seiden is a former Senior Prosecutor in the Manhattan District Attorney’s  Office in New York, where he investigated and prosecuted cases of money laundering, fraud, embezzlement, and other white collar and violent crimes. Mr. Seiden practices as an attorney, restructuring professional, and global forensic investigator; importantly, Mr. Seiden has extensive experience as the receiver or custodian of corporations that “go dark” and whose assets are being misappropriated by officers and insiders. Mr. Seiden’s experience has lead him to regularly be appointed as sole custodian/receiver in such matters around the country, including at least ten such appointments by this Court in the last five years.

The document also confirms that Jen Mellon resigned from the board.

The case alleges that Danny Boice was transferring $750 thousand a year into an LLC which he controls!

Anchorage is recommended the court appoint a former Southern District of New York prosecutor with experience prosecuting money laundering, fraud, embezzlement, and other white collar crimes to act as a receiver (when a company goes bankrupt or is in receivership the receiver oversees the sale and disbursements of the assets).

If I was a Limited Partner in Anchorage I’d be suing Anchorage. Why would these know-nothing clowns invest over $6 million in a company and not take a board seat or require annual independent audits by a reputable firm? If anyone deserved to be bilked of cash… it’s these idiots. I guess they never heard of google… Hey, Anchorage, let me google that for you. I warned them in this post on August 2017.

See the lawsuit here: Anchorage_v_Trustify_Receiver

Question? How stupid does an Investor have to be to Invest in Danny Boice and Trustify? Anchorage Invested in two rounds.

Anchorage deserved to be screwed… they didn’t do their homework… they deserve to be sued by their Limited Partners.

How bad are things for Danny Boice, Jen Mellon, and Trustify?

Yup! That’s the company that the fools at Anchorage Capital invested believed was a reasonable investment.

 


Disclaimer: I volunteer my time and am an independent contractor for many organizations. The Views on my blog post are my own and do not represent the views of any of the organizations with whom I dedicate my time. That includes my clients in my coaching practice, the members of my Driven Forward ThinkTank, the University of Maryland. Mach37, The Founders Institute. These views also do not reflect the opinions for any organization that I was formerly associated with including, James Monroe Elementary School, where I graduated with distinction from 6th grade, Lexitron which I left in 1982, Montgomery Youth Hockey or Vistage an organization was grateful to be a part of and happily parted ways in 2014.