Florida residents include a variety of eccentric entrepreneurs and inventors, and without private investors, they might never acquire the funds necessary to manufacture their products. Their ventures, however, may require committing a great deal of time and resources to produce and distribute a product to the appropriate market.

When investors do not receive compensation as promised, a relationship may quickly turn sour. In one case, an inventor found himself facing allegations of fraud. While law enforcement officials may investigate a wide range of factors to build up a case against an individual, the testimony of unsatisfied investors could contribute toward a prosecutor filing charges.

Investors claim briefcase inventor defrauded them

A 56-year-old Sunshine State inventor pleaded guilty to wire fraud on two separate counts and admitted to the prosecution team that he lied to several investors. In an attempt to develop a briefcase capable of protecting valuable items through specialized technology, he allegedly defrauded investors out of $12.5 million, as reported by The Palm Beach Post.

The inventor’s briefcase company went into bankruptcy, and investigators uncovered what appeared to be fraudulent records. The investigation revealed that his benefactors believed the inventor completed building a working prototype, although there was no evidence of a successfully produced high-tech briefcase. A completed briefcase prototype contained flaws, but its inventor allegedly failed to inform his financial backers of its failure.

Investors thought that he sold more than 480 briefcases when in reality his bank account only contained about $640. The judge ordered the inventor to pay restitution to his former benefactors and serve a two-year sentence of incarceration.

A strong defense and reliable records may counteract allegations of fraud

Under different circumstances than those confronting the briefcase inventor, individuals charged with fraud or misrepresentation may have a strong legal defense, especially if a relationship with investors has developed over an extended period. Evidence such as verifiable and accurate documentation may prove to counteract a prosecutor’s allegations that an individual intended to defraud his or her investors out of their funds.