Robert Kelly Sentenced to 27 Months For Securities & Wire Fraud
On September 23, 2014, Robert Kelly, the former chief executive officer of Wwebnet, Inc. (“Wwebnet”), a software development company, was sentenced to 27 months in prison. Kelly is also subject to three years supervised release and required to pay restitution of $2,111,600.
According to the charging documents and related court proceedings:
From 2004 through November 2008, Robert Kelly solicited investors to send money to Wwebnet, Inc. and related companies by misrepresenting that the funds would be used to develop software for transmitting music, videos, and movies over the Internet.
Instead of using the millions of dollars in investor proceeds that he obtained for legitimate business purposes, Kelly diverted a substantial portion of the money that he raised for his own financial benefit. For example, Kelly transferred at least $2 million in investor funds into his personal trading account in the Cayman Islands, which he used to make a series of unsuccessful options trades. Kelly also used nearly $100,000 that he received from investors to pay his federal and state personal income taxes.
At the same time that he was using investors’ money for his own personal benefit, Kelly falsely told his software development team that he was unable to allocate adequate resources for software development and could do so only when he was able to raise money from investors. As a result, Wwebnet lacked the necessary funds to develop its core product and the company ultimately failed.
Kelly’s 27 month sentence begins on November 3, 2014.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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