Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Economy
Related: About this forumFederal Jury Convicts Founder And CEO Of Charlotte Area Start-up Company (Over $25M Fraud)
https://www.justice.gov/usao-wdnc/pr/federal-jury-convicts-founder-and-ceo-charlotte-area-start-company-defrauding-victimsDepartment of Justice
U.S. Attorneys Office
Western District of North Carolina
FOR IMMEDIATE RELEASE
Friday, December 8, 2017
Federal Jury Convicts Founder And CEO Of Charlotte Area Start-up Company Of Defrauding Victims Of More Than $25 Million
CHARLOTTE, N.C. A federal jury convicted Robert M. Boston, 54, of Hickory, N.C., of conspiracy, wire fraud, securities fraud and money laundering for his role in defrauding victims of more than $25 million, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. The jury delivered the guilty verdict following a five-day trial, which began on Monday December 4, 2017.
(snip)
According to filed court documents and evidence presented at trial, Boston and co-defendant Robert LaBarge defrauded franchisees, investors, and lenders of their start-up company, Zloop. Through their fraud, the defendants obtained millions of dollars, much of which was spent on expensive personal real estate, a private plane, and the racing career of Bostons son. Evidence at trial indicated that Boston caused Zloop to spend more money on his sons racing career than the entire operational revenue of the company before it went bankrupt. According to evidence presented at trial, while inquiring about the potential purchase of a private island, Boston wrote, My son is a NASCAR driver I spend 5 Million a year so he can play race car driver.
According to previously filed court documents, trial evidence and witness testimony, Boston and LaBarge founded Zloop, an electronic waste recycling firm, in 2012 and began marketing Zloop franchises the same year. Court records show that Boston concealed crucial information from franchisees, including that Bostons former company had filed bankruptcy, that Boston had filed personal bankruptcy, that Boston had a judgment against him for fraud, and that Boston had been held liable in an action alleging that he had knowingly submitted false financial documentation to a bank to obtain a $2.9 million line of credit. When Boston was warned that concealing this information from the franchisees of Zloop would be fraud, he wrote, it is my decision how I want to move forward.
Beginning in or about December 2012, Boston and LaBarge caused Zloop to raise money through the sale of equity. To sell equity in the company, Boston and LaBarge caused a misleading private placement memo (PPM) to be sent to investors who invested millions in Zloop. Evidence at trial demonstrated that the PPM contained material half-truths and omissions, including the omission of the litigation and bankruptcy history of Boston, that Zloop was planning to use the investors money to pay off a $4 million debt that it owed to a prior lender, and that Boston and LaBarge had already caused Zloop to spend more than $1.5 million on their personal real estate. Evidence at trial also indicated that the books and records of Zloop had been falsified to conceal the personal real estate expenses. Evidence at trial also demonstrated that Boston promised investors that their money would be held until the offering closed, but he instead spent their money on the same day that much of it came in.
When Zloop investors sought the return of their money in or about the middle of 2013, Zloop sought a loan from an individual identified as Victim 1. To do so, Boston repeatedly falsified emails to make the company look more attractive to Victim 1. According to trial evidence, Boston induced Victim 1 to secure a $14 million line of credit from a bank. After Boston and LaBarge caused Zloop to draw approximately $3.5 million from that line of credit, they spent hundreds of thousands of dollars on, among other things, a private plane, a new Corvette, and a new Grand Cherokee. Zloop subsequently drew an additional $1.3 million from the credit card line, of which more than $500,000 was spent on racing-related expenditures and approximately $79,808 on a suite at a professional football stadium.
(snip)
InfoView thread info, including edit history
TrashPut this thread in your Trash Can (My DU » Trash Can)
BookmarkAdd this thread to your Bookmarks (My DU » Bookmarks)
1 replies, 930 views
ShareGet links to this post and/or share on social media
AlertAlert this post for a rule violation
PowersThere are no powers you can use on this post
EditCannot edit other people's posts
ReplyReply to this post
EditCannot edit other people's posts
Rec (1)
ReplyReply to this post
1 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
Federal Jury Convicts Founder And CEO Of Charlotte Area Start-up Company (Over $25M Fraud) (Original Post)
nitpicker
Dec 2017
OP
nitpicker
(7,153 posts)1. Link to ESPN