The former business owner of Zloop, the electronic recycling company in North Carolina that declared bankruptcy in North Carolina in 2015 found himself in hot water this week. The founders of Zloop found themselves in the target hairs o federal prosecutors who found it curious that Zloop spent more marketing money to sponsor a NASCAR truck series team than it did on the rest of their operational revenue. The bankruptcy ended up costing the company big as the company spent hat no start-up company would spend more than $6 million of investor money in marketing. The company had attempted to establish an e-scrap computer recycling on a national scale, but not only found itself in bankruptcy but also being sued for over 80 million. As it turns out, the entire company seemed to be a front for scamming investors to pay for a lavish lifestyle and the owner’s NASCAR career.
Zloop filed bankruptcy in November of 2015 with $25 million in assets and $32 million in liabilities after allegations of misappropriation of funds and unfair trade practices. When Zloop went belly up, more than 20 creditors came forward with claims totaling $25 million. Boston’s son was not involved in the scheme but was forced to end his NASCAR driving career as a result of Zloop’s bankruptcy.
Federal Indictment Charges
In May of 2017, federal court officials unsealed a criminal indictment for the founders, claiming they had committed money laundering, bank fraud, wire fraud, and securities fraud. Bankruptcy fraud was not included in the initial charges. The explanation of the allegations against the bankruptcy business owners was that Robert Boston and Robert LaBarge had defrauded franchisees, investors, and lenders by obtaining millions of dollars in investment money and spending the cash on lavish digs, a private plane and a $3.2 million dollar truck racing contract.
Former Zloop Owner found Guilty
As last Friday drew to a close, Robert Boston, the founder of Zloop, was found guilty of conspiracy to commit wire fraud, wire fraud, securities fraud and money laundering by a jury of his peers. Boston’s co-conspirator pleaded guilty in an earlier plea deal in exchange for damning evidence against his former business partner. During the course of the trial, it was brought to light that Boston used $1.5 million in investor money to pay for his house and vacation homes. Important information was also left out of the Zloop’s bankruptcy documents.