A Florida businessman who solicited over $20.5 million from investors from his coupon app is facing scrutiny from US regulators. However, the Securities and Exchange Commission (SEC) suggests that he embezzled those funds to pay off his gambling debts.
Groupon competitor loses it all
The Gerald C. Parker is based in Palm Beach County who created an app similar to Groupon to help people find the right coupons for their purchases. He even received $20.5 million from investors but ended up using the funds to pay off his personal debts. He was indebted to two casinos owned by the Seminole Tribe. He also used a sizable amount to pay the salesmen who helped him in soliciting investments.
Florida Businessman Embezzled Funds to Pay His Gambling Debts
Parker shared lofty business ideas with investors, calling himself a visionary and selling them big plans to create a Groupon rival called Social Voucher. He received funding from about 400 investors. According to the SEC, he owed about $2 million to the two Seminole Tribe casinos and paid about $9.6 million, i.e. almost half of the money generated via investors to salesmen. The regulator said that the sales commission amount was ‘exorbitant.’
Now he is facing a federal fraud suit for making misleading and false statements to investors. The 76-year-old’s company Social Voucher and its affiliated company Stocket Inc. first faced a lawsuit in September 2018 by 16 investors.
Things went south quickly
The lawsuit alleged that Social Voucher stopped its operations after its offices were raided in June 2018. The office, based in Palm Beach County, was raided by the FBI for unknown reasons. The investors believed that the Social Voucher app will be affected because of the raid and they filed a lawsuit, making Miami-based attorney Jeffrey Schneider their counsel.
Schneider suggests that the gaming and eCommerce features of Social Voucher app were quite interesting because of which it gained attention from several investors. He also said that the Department of Justice has not disclosed why they raided the company’s offices. Because of this, it is impossible to figure out where exactly the funds have gone. There is no detail available on the amount of money going in and out of the said business.
Though the details of the funds embezzled from the company are unknown, the SEC has ruled that the 76-year-old Parked used up at least $4.6 million from the investor funds. This amount, coupled with the outrageously high amount paid to sales agents, could land him in deep trouble.
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