FRESNO, CA — Royce Newcomb, 62, of Fresno, pleaded guilty today to charges of wire fraud and money laundering after he defrauded investors, lenders, and the federal government out of $4.2 million, the U.S. Attorney’s Office for the Eastern District of California announced.
The Fraudulent Scheme
Newcomb, the owner of Strategic Innovations, a technology startup, falsely claimed to have developed innovative products, including a smart home and business security system designed to prevent package theft and protect deliveries. His product, the eLiT Address Box & Security System, gained media attention, even earning a spot on Time Magazine’s Best Inventions of 2021. However, the products were never fully developed.
Newcomb misled investors by claiming he had received a grant from the National Science Foundation to fund his work, and he convinced them to invest in the startup. Instead of using the funds for product development, Newcomb spent the investor money on personal luxuries, including gambling, a Mercedes, a Jaguar, and a mansion. He also used the funds to repay earlier investors seeking refunds and to finance unrelated projects without authorization.
Fraudulent Loan Applications
In addition to the theft from investors, Newcomb obtained a $70,000 COVID-19 relief loan from the Small Business Administration and more than $190,000 in private loans by falsely claiming that his company had significant revenue.
Sentencing and Potential Penalties
Newcomb is scheduled for sentencing at a later date. He faces up to 20 years in prison and a $250,000 fine for the wire fraud charge, and up to 10 years in prison and an additional $250,000 fine for the money laundering charge.
The case serves as a reminder of the DOJ’s continued efforts to hold individuals accountable for fraudulent schemes that exploit investors, lenders, and government relief programs.
