PROVO, Utah (ABC4) — A Utah businessman who was deemed CEO of the Year’ by Utah Business in 2022 was arrested Wednesday for his alleged involvement in misappropriating millions of dollars of investors’ funds, according to the U.S. Attorney’s Office.

An indictment was unsealed this week, charging three developers of the crypto technology company SafeMoon with several fraud-related charges. Two of the three executives have been arrested, including Braden John Karony, 27, who was arrested in Provo. The other arrested suspect, Thomas Smith, 35, was arrested in New Hampshire, and the third, Kyle Nagy, 35, has not yet been found.

“As alleged, the defendants deliberately misled investors and diverted millions of dollars to fuel their greedy scheme and enrich themselves by purchasing a custom Porsche sports car, other luxury vehicles and real estate,” said U.S. Attorney Breon Peace of the Eastern District of New York. 

SafeMoon is a crypto technology company whose digital assets, or crypto tokens referred to as ‘SFM,’ were first made available in 2021 on a public blockchain. “In the months after its launch in March 2021, SFM grew to have more than one million holders and a market capitalization of more than $8 billion,” federal prosecutors said.

The fraudulent scheme involved “locked” liquidity pools that were supposed to automatically increase due to the mandatory tax on every SFM transaction. The suspects told investors it was locked to prevent “rug pull,” a type of crypto fraud.

However, according to prosecutors, the company’s leaders did access SFM liquidity pools and used them to divert millions of dollars of tokens from the liquidity pools for their own gain.

They also allegedly bought and sold SFM for personal benefit, which was contrary to what they told SFM investors.

“Although this fraud scheme may be complex, the end result is simple—theft. Investors were assured their money would be safe while the defendants allegedly misled investors and diverted millions of dollars to line their pockets and their driveways,” IRS-CI Special Agent-in-Charge Tom Fattorusso said, in a statement.

Officials say the three suspects were charged with conspiracy to commit securities fraud, conspiracy to commit wire fraud, and money laundering conspiracy.

Charges are allegations only. All arrested persons are presumed innocent unless and until proven guilty beyond a reasonable doubt.