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Startup horror story continues with indictment

The Justice Department files charges against the executive at the heart of a cautionary tale about the Silicon Valley dream.

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The CEO of a company that became a symbol of the startup world's dark side was indicted Thursday by the US Department of Justice on a charge of defrauding his employees.

The DOJ alleges that Isaac Choi, the 36-year-old founder and CEO of WrkRiot, falsely claimed he had the money to pay workers. He then defrauded them by issuing forged wire transfers from a US bank. The indictment also alleges Choi lied about his education and industry experience.

Choi's lawyer didn't respond to a request for comment.

The story came to light last year when a former employee of Choi's, Penny Kim, wrote a post on Medium saying she'd been scammed by an unnamed company, "Startup X." Other employees later identified the company as WrkRiot, a now defunct job-seeking platform said to rely on machine learning.

Kim's post was widely talked about in tech circles as a gripping cautionary tale that revealed the nightmare flip side of the Silicon Valley dream.

"My main goal [in publishing the post] was to show people the other side of what Silicon Valley and startups are like," Kim told Quartz last year. "Everyone has hopes and dreams. I did. I moved out to California to achieve that dream."

According to Crunchbase, Wrkriot won $130,000 in seed funding on August 1, 2016, the same month the story broke.