Robo Enterprises Inc. CEO David Rose was charged with 21 counts of fraud by a federal grand jury this week for allegedly telling investors in his oil and natural gas company that all of their money would go for drilling work when some of it went for his personal benefit and to pay company bonuses and salaries.
Rose was also accused of falsely claiming to investors that his company had partnership agreements with Texaco, Citgo and other major companies.
He faces a maximum prison sentence of 440 years and $5.5 million in fines if convicted.
The indictment, returned Wednesday in federal court in Missouri, also seeks the forfeiture of $6.6 million.
Robo's drilling project reportedly lost money, yet the company made huge profits by extracting millions of dollars from investors, a feat it was said to achieve "by pushing securities laws to their very limits and sometimes beyond."
Robo reportedly routinely misrepresented the risks of its investments, overstated its drilling successes, failed to disclose questionable uses of investor funds and priced its investments so high -- sometimes five times above its drilling and operating costs -- that investors had no realistic chance of making a profit.
Several thousand investors put an estimated $100 million or more into the company, and they lost at least 95 percent of those investments before any tax write-offs, according to reports.
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