Chicago, IL-(ENEWSPF)- A federal jury in Chicago has convicted a Silicon Valley businessman of defrauding investors in his computer companies after soliciting and obtaining some of the money via crowdfunding.
JEFFREY BATIO, 50, of Santa Clara, Calif., was found guilty Friday of all 12 counts against him, including six counts of mail fraud and six counts of wire fraud. Each count is punishable by a maximum sentence of 20 years in prison. U.S. District Judge Rebecca R. Pallmeyer set sentencing for Sept. 3, 2019.
The conviction was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI. The government is represented by Assistant U.S. Attorneys Jacqueline Stern and Matthew Schneider.
Batio owned and controlled two computer businesses, Armada Systems LLC and Idealfuture Inc. The companies claimed to produce a portable computer that would combine a laptop, tablet and smart phone into one device. The 3-in-1 apparatus was known at various times by the names Stealth, IF Convertible, and Dragonfly Futurefon. The companies also claimed to produce a device called the Radian, which was billed as a multi-screen laptop computer.
Evidence at trial revealed that for more than a decade Batio made material misrepresentations about his companies and products. For example, Batio falsely claimed that Armada and Idealfuture had completed the engineering on the 3-in-1 computer and the multi-screen system, and that the products were close to being brought to market. In reality, Batio knew the products were not complete and that production would not start within the promised timeframe. Batio also claimed to be involved in discussions with large technology companies concerning partnership deals, licensing arrangements and marketing agreements, when, in fact, Batio’s contacts with those companies typically consisted of nothing more than his opening sales pitch.
The fraud scheme began in 2003 and continued until 2016. Batio originally sold membership shares in his companies and offered his products for advance sales that were never fulfilled. From 2003 to 2014, Batio defrauded victims out of $5 million. As the years passed and he failed to produce or license any products, Batio in 2014 began to solicit funds on the crowdfunding website Indiegogo.com. From 2014 to 2016, Batio raised more than $700,000 on Indiegogo from investors all over the world by fraudulently promoting and selling the 3-in-1 device.
This is from a release from the United States Department of Justice.