The founder of a Lee County-based company was sentenced to just over five years in prison Tuesday for wire and securities fraud. The news was announced by Louis V. Franklin, U.S. attorney for the Middle District of Alabama, Joseph Borg, director of the Alabama Securities Commission and James Jewell, special agent in charge for the FBI.
Kyle Sandler, 43, of Auburn founded Roadhouse LLC in Lee County. Evidence showed that from 2015 through 2016 Sandler advertised Roundhouse as a business incubator that provided services and training to startup companies.
During the course of his business, Sandler accepted approximately $1.9 million from at least 74 investors and knowingly sold shares in Roundhouse that were not registered on a national securities exchange. He then issued stock in Roundhouse and oversold the equity by approximately 100 percent, according to a release from the Department of Justice.
Sandler also told potential Roundhouse investors in Lee County he was a former employee of Google, and the company paid him millions of dollars thought he never worked for the company among other false statements.
He has two prior criminal convictions based on fraudulent conduct. He also used Roundhouse funds from investors for personal expenses such as rent payments and childcare services, both of which he failed to disclose to investors.
He will serve 63 months in federal prison without parole, because there is no parole in the federal system. He was also ordered to pay over $1.9 million in restitution to his victims, according to a release from the Department of Justice.
“Mr. Sandler violated the trust of his investors with lies and deception,” Franklin said. “They trusted him with their hard-earned money, and he used it as his personal piggy bank. My office will continue to work with our law enforcement partners to protect the community from these types of schemes.”
The FBI and the Alabama Securities Commission investigated the case, which was prosecuted by Assistant U.S. Attorney Denise Simpson, Special Assistant U.S. Attorney Amanda Senn and former Middle District Assistant U.S. Attorney Steven Lee.
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