Las Vegas, NV – In a harsh judgment, Russell Pike, the former CEO of Xyience Inc., has been sentenced to 52 months in prison for his April 2012 conviction for tax evasion.
Pike, 50, who amassed a fortune from the sale of his sports energy drink company, was convicted of one count of tax evasion for 2006, in which he evaded taxes due on over $7.9 million of income.
According to evidence presented at trial, Pike founded Xyience Inc. in 2004, which manufactured, marketed and sold sports energy drinks, most notably, Xenergy, which was sold in over 45,000 stores throughout the United States.
Pike’s lavish lifestyle was funded by his ill-gotten gains, as he expended millions of dollars to drive luxury cars, bet millions of dollars at local sports books, and purchase high-end vehicles, including a 2007 Mercedes Benz SL55 AMG for $151,614.
The evidence also revealed that Pike made payments on a 2005 Lexus SUV and 2005 Land Rover, which were held in the name of a nominee, further evading taxes and attempting to conceal his assets.
U.S. District Judge James C. Mahan not only sentenced Pike to 52 months in prison but also ordered him to serve three years of supervised release, with a special condition that he pay $1,189,773 in restitution to the Internal Revenue Service (IRS).
Assistant Attorney General Kathryn Keneally and U.S. Attorney Daniel G. Bogden commended the efforts of the special agents from IRS Criminal Investigation who investigated the case and Assistant United States Attorneys Nicholas D. Dickinson, Timothy Vasquez, and Tax Division Trial Attorney Kimberly Shartar who prosecuted the case.
The Justice Department’s Tax Division has made it clear that tax evasion and money laundering will not be tolerated, and this sentence serves as a stark reminder of the consequences of such crimes.
The case serves as a warning to others who would attempt to hide their ill-gotten gains and evade taxes, that the law will catch up with them and they will face severe consequences.
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