U.S. Attorney's Office
Northern District of California
(415) 436-7200
October 7, 2014

Former CEO of San Francisco Technology Start-Up Pleads Guilty to Wire Fraud

SAN FRANCISCO—Jonathan Edward Mills, the former Chief Executive Officer of a San Francisco-based technology company, pleaded guilty in federal court in San Francisco today to two counts of wire fraud, United States Attorney Melinda Haag announced.

Mills founded Motionloft, Inc., in 2010, and he served as its CEO until he was fired in December 2013. In pleading guilty, Mills admitted that he falsely told victims that Motionloft was soon to be acquired by a well-known multinational company based in Silicon Valley. Mills told his victims that in exchange for providing him money to be invested in Motionloft, these investors would earn an ownership stake in Motionloft and massive profits upon completion of the imminent acquisition. In furtherance of his scheme, Mills claimed that the acquiring company had agreed to pay hundreds of millions of dollars to acquire Motionloft. When the purported acquisition failed to materialize, Mills told his victims a series of false excuses, including blaming lawyers, blaming the government shutdown, and blaming financial institutions. In pleading guilty, however, Mills admitted that not only was there no such acquisition planned, but Mills spent substantial amounts of his victims’ money on his own personal expenses such as vacations and other entertainment. In all, Mills admitted that he caused his victims to lose approximately $765,000.

Mills, 30, of San Francisco, was arrested on February 19, 2014, after a Criminal Complaint was filed against him. He was indicted by a federal Grand Jury on March 13, 2014. In that Indictment, he was charged with two counts of wire fraud, in violation of Title 18, United States Code, Section 1343, and four counts of money laundering, in violation of Title 18, United States Code, Section 1957. Pursuant to the Plea Agreement, Mills pleaded guilty to both counts of wire fraud.

Mills’ sentencing hearing is scheduled for February 3, 2015, before The Honorable Richard Seeborg, U.S. District Court Judge, in San Francisco. The maximum statutory penalty for each count of wire fraud, in violation of Title 18, United States Code, Section 1343, is 20 years in prison, a fine of $250,000, plus restitution. Any sentence, however, will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Doug Sprague is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rawaty Yim and Muffy Mallory. The prosecution is the result of a two-month investigation by the Federal Bureau of Investigation.

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