CEO of Tech Startup WrkRiot Convicted of Fraud

Isaac Choi pleaded guilty on Monday, and faces up to 20 years in prison.

New businesses are often fraught with stress, bad communication, and the occasional late paycheck — but this story takes the cake. If you think your company is disorganized and sketchy, be grateful you never worked for WrkRiot. 

WrkRiot was founded by 36-year-old Isaac Choi in Santa Clara, with the now-very-ironic tagline “no games, just jobs.” Formerly called and JobSonic, it looked good on paper — but dig under the surface just a little, and all sorts of inconsistencies start popping up. Using at least four different names, Choi falsified his educational and professional history and personal wealth, and scammed at least a dozen employees before being caught by authorities.

The situation was first picked up by the press when former employee Penny Kim wrote a Medium post titled “I Got Scammed By A Silicon Valley Startup” on Aug. 18, 2016.

“There’s no way a startup I found on is going to screw me over,” Kim wrote. “Oftentimes I feel embarrassed, enraged, and regretful when I have to relive it, but in the end it is a story and life lesson which should be shared so that others may know major red flags to look out for when choosing to work for a startup or new business. ”

From the get-go, Kim was burned by Choi. She applied for a job in marketing at the company while living in Dallas after seeing it on a job site, and after securing a phone interview was asked to fly out within 24 hours for an in-person chat. She got the job, secured a $10,000 sign on bonus for relocation assistance, a $135,000 salary, equity, and a three-month severance package. It was a good deal — one she later said was “too good to be true.”

She left her apartment, cat, and boyfriend in Texas, and flew to California — but upon arriving quickly began noticing some inconsistencies. Way more people had been hired since she interviewed. Many of the employees at the new company were Chinese, here on Visas. Another had been poached from a company across the hall. And her first paycheck was late. Though she later received it as a cashier’s check, no bonus was included. 

The plot thickened when Kim learned one of her colleagues had loaned Choi $50,000 from his personal savings account, after Choi told him the $2 million he said he’d had was tied up by the IRS in offshore accounts. Wages continued to be late, and stress rose, with people threatening to quit. To keep them on, Choi took a screenshot of a Wells Fargo wire transfer and sent it to his 17 employees, claiming their pay was on its way. It was an intern who found the original image online and realized the one sent out was photoshopped, and fake.

Kim never got her full pay, and after four months she filed a wage claim and left the company.

WrkRiot limped along for a while, but fell apart when advisors and investors pulled out, and especially when the FBI was brought in to investigate Choi. The case reached such notoriety that Wired, Business Times, and the New York Times all covered the case.

In a news release posted on its site in June 2017, the Department of Justice announced that Choi “falsely claimed that he received a degree from a prestigious New York business school, worked as an analyst at a major financial institution, had access to significant personal wealth, and was investing significant amounts of that money into the company. The indictment further alleges that after certain WrkRiot employees came to learn that WrkRiot’s bank accounts did not contain the capital that Choi claimed to have invested, Choi falsely claimed that a significant portion of the money he pledged to invest was tied up overseas and elsewhere.”

The charges stuck, and on Monday Choi pleaded guilty in court. He now faces a maximum penalty of 20 years in prison, and a $250,000 fine. Judge Edward J. Davila will announce his sentencing on May 24.

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