Start-Up Founder Sentenced For Fraud
from the good-riddance dept
There were plenty of stories of con artists starting up fake dot coms during the boom, and then using all those VC funds for their own personal things. One of the biggest (known) scams was at PacketSwitch.com, where the founder, Steven Ristau, claimed he had invented a technology that could wirelessly beam data from a distance of 12 miles at a high enough rate that you could view a television program online. In reality, he simply hid a wireless access point in the ceiling of the room where he ran demonstrations. It makes you realize just how little due diligence VCs were doing back during the boom times. These days, however, Ristau has been found guilty of fraud and sentenced to 11 years in jail. He’s also been ordered to pay back all the money he conned out of people (which he used on vacations, a house, cars, and a bodyguard, among other things). However, most people who were conned probably won’t ever see their money again, as he spent a large portion of it.