Local Businessman Sentenced for Stealing More Than $835,000 from His Business Investors
|U.S. Attorney’s Office August 27, 2013|
ATLANTA—Kevin Patrick Loughery, co-founder of the former Atlanta-area startup Geometrix has been sentenced for defrauding Geometrix’s investors by using approximately $835,000 in the investors’ funds for himself.
“The defendant had a duty to keep the investor funds secure in an escrow account and to use them for the benefit of Geometrix. Instead, he used the money to support his lavish lifestyle,” stated United States Attorney Sally Quillian Yates. “The prosecution of this case and today’s sentence reflects our ongoing commitment protect the public from individuals who offer seemingly attractive investment opportunities, when they only intend to enrich themselves at the expense of others.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, “Today’s sentencing of Mr. Loughery will hopefully provide some sense of justice to those victim investors who now suffer substantial financial losses at the hands of Mr. Loughery’s greed. The FBI will continue to identify, investigate, and prosecute individuals such as Mr. Loughery who divert investor-based funds into their own bank accounts.”
According to United States Attorney Yates, the charges, and other information presented in court: in 2008, Kevin Patrick Loughery began soliciting investments from his friends and business associates in Geometrix, a Georgia start-up company that he co-founded in 2007. Loughery assured investors both telephonically and via e-mail that their investment would remain in escrow until the completion of Geometrix’s issuance of stock and accompanying documentation.
In an e-mail to one such investor, Loughery assured the investor that the money would be kept in an escrow account, and Loughery instructed the investor to wire the money into such an account. However, the money never went to an escrow account because Loughery’s wiring instruction was not for an escrow account but rather was for Loughery’s own account for a separate business, KLM Investments, of which Loughery was the sole proprietor. The investor wired over $300,000 into the account. Loughery then sent the investor an e-mail stating that he would receive 400,000 shares of Geometrix for his investment, which the investor never received. In total, Loughery solicited $835,000 in investments from various investors that were supposed to be kept in escrow but instead were spent by Loughery. Loughery subsequently declared bankruptcy.
Loughery, 49, of Atlanta, Georgia, was sentenced to two years, six months in prison. He was also ordered to serve three years on supervised release following his prison term and to pay $780,000 in restitution to the victims of his fraud. On March 22, 2013, Loughery pleaded guilty to a criminal information charging him with wire fraud.
This case was investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Karlyn J. Hunter prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.Pressemails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.