Nevada Energy Drink Mogul Sentenced for Tax Evasion

A former Nevada sports energy drink company CEO has been sentenced to 52 months in prison for tax evasion, U.S. Attorney Daniel G. Bogden announced today. Russell Pike, 50, of Las Vegas, was convicted of one count of tax evasion for 2006 in which he evaded taxes due on over $7.9 million of income.

Pike, the former CEO of Xyience Inc., which manufactured, marketed and sold sports energy drinks, most notably, Xenergy, which was sold in over 45,000 stores throughout the United States, was found guilty of concealing his income from the Internal Revenue Service (IRS).

According to evidence presented at trial, Pike sold over 4.4 million shares of his Xyience stock for approximately $7.9 million in 2006, including a sale of over three million shares to an investor for $5 million. He then requested that the investor change the date of the stock purchase agreement from 2006 to 2007, allowing him to avoid paying taxes for 2006.

The evidence also revealed that Pike spent millions of dollars to sustain his lavish lifestyle, drive luxury cars and bet millions of dollars at local sports books. In 2006, he made payments on a 2005 Lexus SUV and 2005 Land Rover that were held in the name of a nominee. He also used a nominee to purchase a 2007 Mercedes Benz SL55 AMG for $151,614.

U.S. District Judge James C. Mahan sentenced Pike to three years of supervised release with a special condition that he pay $1,189,773 in restitution to the IRS. Bogden and Assistant Attorney General Kathryn Keneally commended the efforts of the special agents from IRS Criminal Investigation who investigated the case, as well as the prosecutors who brought the case to justice.

Pike’s conviction stems from a bench trial held on April 2, 2012. His sentence is a result of the efforts of Assistant U.S. Attorneys Nicholas D. Dickinson and Timothy Vasquez, as well as Tax Division Trial Attorney Kimberly Shartar.

The Justice Department’s Tax Division has been actively pursuing individuals who evade taxes and other financial crimes. Additional information about their enforcement efforts is available at www.usdoj.gov/tax.