Kevin Patrick Loughery, a North Atlanta resident and 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.
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,” U.S. Attorney Sally Quillian Yates said.
In 2008, Loughery began soliciting
investments from his friends and business associates
in Geometrix, a Georgia start-up company that he co-founded in 2007, Yates said. He assured investors both telephonically and via email that their
investment would remain in escrow until the completion of Geometrix’s
issuance of stock and accompanying documentation.
In an email to
one such investor, Loughery assured the investor the money would be
kept in an escrow account, and Loughery instructed the investor to wire
the money into such an account. But
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 more than $300,000 into the account. Loughery sent the investor an
email saying 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 several investors who were supposed to be kept in escrow but instead were spent by
Loughery. He subsequently declared bankruptcy.
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, Loughery pleaded
guilty to wire fraud.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Karlyn J. Hunter prosecuted the case.