Russell Pike, Tax Evasion, Nevada 2012

Las Vegas, NV – Russell Pike, 50, of Las Vegas, the former CEO of a Nevada sports energy drink company, Xyience Inc., was sentenced to 4 years and 4 months in prison for tax evasion, announced Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division and U.S. Attorney for the District of Nevada Daniel G. Bogden today.

Pike was convicted of one count of tax evasion for 2006, in which he evaded taxes due on over $7.9 million of income. The evidence presented at trial showed that Pike founded 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.

Upon the inception of Xyience in 2004, Pike received at least 12 million shares of Xyience stock. During 2006, Pike sold over 4.4 million shares of his Xyience stock for approximately $7.9 million, which included a sale in November 2006 of over three million shares to an investor for $5 million.

The evidence also established that during 2006, Pike expended millions of dollars to sustain his lavish lifestyle, drive luxury cars and bet millions of dollars at local sports books. Furthermore, Pike made payments on a 2005 Lexus SUV and 2005 Land Rover that were held in the name of a nominee.

In addition to 52 months of prison, Judge James C. Mahan sentenced Pike to 3 years of supervised release with a special condition that he pay $1,189,773 in restitution to the Internal Revenue Service (IRS).

The U.S. Attorney Daniel G. 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 Assistant United States Attorneys Nicholas D. Dickinson and Timothy Vasquez and Tax Division Trial Attorney Kimberly Shartar who prosecuted the case.

The sentencing took place on an unspecified date, but the crime occurred on April 2, 2012, and the conviction was for tax evasion for 2006. Pike is required to pay $1,189,773 in restitution to the IRS. The case was investigated by IRS Criminal Investigation and prosecuted by Assistant United States Attorneys Nicholas D. Dickinson and Timothy Vasquez and Tax Division Trial Attorney Kimberly Shartar.

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