Los Gatos resident David R. Foley, the former chief technology officer of video game developer Global VR, and former owner of NexTune Corporation, doing business as UltraCade Technologies, has been sentenced to two years in prison and ordered to pay a $5,000 fine for engaging in a conspiracy to commit mail and wire fraud, and conspiracy to commit bank fraud, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.
Foley, 48, pleaded guilty on Jan. 6, 2012 to one count of conspiracy to commit mail and wire fraud, as charged in a superseding indictment filed on Jan. 9, 2009, and one count of conspiracy to commit bank fraud, as charged in an indictment filed on August 18, 2011.
The charges contained in the separate indictments were consolidated for the guilty pleas.
In his plea agreement, Foley admitted that he manufactured thumb drives, known as “game packs,” containing video gaming software that could be loaded onto arcade video game machines made for the home market, federal prosecutors said in a press release.
Foley illegally produced the products from his home while working as the chief technology officer of Global VR, which had previously acquired all rights to produce and sell games under the UltraCade name, federal prosecutors said.
After producing the game packs, Foley sold the products to a co-defendant located in Milford, Conn., and agreed to sell the game packs to the public using packaging and advertisements that falsely represented the goods to have been genuinely manufactured by UltraCade, according to federal prosecutors.
Foley thereafter received payment for the illegally manufactured game packs by mail and wire, federal prosecutors said.
Foley further admitted that he defrauded Countrywide Home Loans (now owned and operated by Bank of America) of mortgage and home equity line of credit loans in the amounts of $2,624,475 and $374,925, federal prosecutors said.
He did this by falsely claiming that he was still employed at Global VR. Foley had been fired from his job by the time the loan applications were submitted, federal prosecutors noted.
Foley admitted that he instructed a co-defendant to contact Countrywide Home Loans to falsely confirm his continued employment after his employment had been terminated and prior to receiving the funds, the release added.
The sentence was handed down by United States District Court Edward J. Davila, in San Jose, the release said.
Judge Davila also sentenced Foley to a three-year period of supervised release.
The prosecution was the result of an investigation by the Federal Bureau of Investigation, according to the release.