JEFFERSON CITY, MO -- A Lake Ozark man and two co-conspirators were convicted in federal court for defrauding investors of $3 million intended to fund vending technology that was never brought to market, according to Beth Phillips, U.S. Attorney for the Western District of Missouri.
Craig F. Swoboda, 74, was sentenced to five years in federal prison without parole. The court also ordered him to pay $2.4 million in restitution. In January 2009, Swoboda, who was the chief executive of United Management Inc. (Columbia, MO), pleaded guilty to his role in a conspiracy to commit mail and wire fraud from December 1997 through February 2006.
Husband and wife William Colwell McNeely, 78, and Gail M. Wilkerson, 63, were respectively president/chief operating officer and secretary of UMI. The two also pled guilty to taking part in the conspiracy. Wilkerson was sentenced to two years in federal prison without parole and ordered to pay $2.4 million in restitution. McNeely awaits sentencing.
McNeely admitted that he formed UMI to solicit investments from individuals, and sold what purported to be opportunities to purchase and participate in the development of vending machine-related inventions. Although investors were told that the product was ready for mass production, he said financial and technical setbacks caused substantial delays and prevented the production and marketing of the product.
Victims invested up to $400,000 in the fraudulent scheme, with a total loss of $3 million. Swoboda and McNeely reportedly admitted that they used investor money for their own personal use and gain.
McNeely, Swoboda and Wilkerson made false and misleading statements in order to attract investors, according to the district attorney. For example, investors were told that each of the defendants -- and their families -- had invested large sums of money toward the development of the vending machine-related inventions.
The defendants also omitted certain material facts that would have discouraged potential investors, such as the fact that McNeely and UMI were involved in pending lawsuits with existing investors and that few investors had gotten their investment back without filing a lawsuit.
The trio also reportedly misled investors by stating that UMI was worth $150 million and that it had agreements with various companies to distribute the product. They also said the company shares were worth $5 a share, that a major bottler wanted to buy UMI for $1 per share, and that investors could get their money back if they were not happy.