From 2010 to 2012, the co-founders of OXYwater secured $9.5 million in investments to produce a new sports drink, which they claimed had higher amounts of oxygen and healthy minerals in it.
The company began running out of money in 2012, and then closed permanently in 2013. It’s at that point that investors wondered what happened to their money, so the FBI and the IRS became involved in an investigation.
They found that the co-founders misappropriated approximately $2 million in funds, spending money on luxury items, such as swimming pools, cars, guns and jewelry. The investors lost all their money, and the co-founders were convicted of fraud, money laundering and tax crimes. They are now serving prison sentences, during which time they are on the hook fines and restitutions to their victims.
Information in this case study is based upon publically available information. Compli, Mr. Ruden and Ms. O’Donnell are not affiliated with the companies or individuals mentioned below.
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