Robert Alexander Charged with Lying to Investors and Misappropriating Investor Funds
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that ROBERT ALEXANDER was arrested this morning on securities fraud and wire fraud charges stemming from his participation in a scheme to defraud investors by soliciting investments in his online gaming company (the “Company”) through false representations and using investor funds for his own personal use.
ALEXANDER is expected to be presented today in Manhattan federal court before the U.S. Magistrate Judge Ona T. Wang.
U.S. Attorney Geoffrey S. Berman said: “As alleged, Robert Alexander lied to investors in his online gaming company, fabricating information about his professional background and promising to use investor money solely to further the aims of the business. Instead, Alexander allegedly used more than $1.3 million in investor funds on, among other things, gambling excursions, entertainment venues, and other personal expenses. As this arrest demonstrates, fraud on investors is no game, and we will continue to partner with the FBI to investigate and prosecute those who defraud investors.”
FBI Assistant Director-in-Charge William F. Sweeney, Jr. said: “Time and time again, we come across evidence of investment funds being misappropriated to pay off personal debts or fund extravagant lifestyles. As evidenced by today’s arrest, those who allegedly use these funds for other than their intended purpose are taking a gamble—the bigger the risk does not always mean the greater the reward.”
According to the Complaint[1]:
Beginning in at least 2013 and continuing through in or about 2017, ALEXANDER engaged in a scheme to defraud investors in the Company. Specifically, ALEXANDER solicited and maintained investments in the Company through numerous false representations, including concerning his own professional background, the Company’s financial condition, expected returns on investment, and assurances to investors that their investments would be used solely for the Company’s business purposes.
Also in furtherance of his scheme and contrary to representations made to investors, ALEXANDER used more than approximately $1.3 million of the funds he obtained from investors for his own personal expenses instead of for the Company’s business purposes. For example, ALEXANDER used investor funds to make payments toward his personal credit cards, to fund his gambling excursions to multiple casinos, to make rental payments for his personal residence, and to make car payments for a luxury car purchased for one of ALEXANDER’s family members.
ALEXANDER, 49, of Las Vegas, Nevada, was arrested this morning. ALEXANDER is charged with one count of securities fraud and one count of wire fraud. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million or twice the gross gain or loss from the offense. The wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the work of the FBI. He also thanked the Securities and Exchange Commission.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
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