Robert Kelly, the former CEO of Wwebnet, Inc., a software development company, has pleaded guilty to $2 million securities fraud scheme in Manhattan federal court.
According to the indictment, 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 for legitimate business purposes, Kelly diverted a substantial portion of the money for his own financial benefit. He 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, 57, formerly of New York, New York, resides in Raleigh, North Carolina. He pleaded guilty to one count of securities fraud and one count of wire fraud, which together carry a total maximum term of 40 years in prison.
Kelly also agreed to forfeit $2,111,600 and, separately, pay $2,111,600 in restitution. The sentencing before U.S. District Judge Paul A. Crotty is scheduled for July 17, 2014, at 3:00 p.m.
U.S. Attorney Preet Bharara praised the investigative work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission for its assistance in the case.
The Manhattan U.S. Attorney stated, ‘Robert Kelly took more than $2 million of investor money, obtained through promises that it would be invested in his company’s new technology and in growing the business, and instead, used it to make unsuccessful options trades and to pay for his own personal income taxes.’
With this plea, Kelly has admitted to stealing and spending innocent investors’ money.
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Key Facts
- State: New York
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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