A Hickory man was convicted Friday of defrauding investors out of $25 million, money he used to buy pricey real estate, expensive cars and to back his son’s NASCAR career.
At the height of his ill-gotten wealth, Robert Boston contemplated buying his own island, prosecutors say. He diverted $6.1 million of company money so his son Justin could race cars and trucks.
“My son is a NASCAR driver,” Boston wrote at one point, according to prosecutors. “I spend $5 million a year so he can play race car driver.”
Prosecutors say that money was not his to spend. Now, the elder Boston could spend decades in prison after being found guilty of wire fraud, securities fraud and money laundering.
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The sentencing for Boston and co-defendant Robert LaBarge will occur at a later date. LaBarge pleaded guilty in November to conspiracy to commit wire fraud.
Both were part of a scheme that defrauded investors, lenders and franchisees out of vast amounts of money, the U.S. Attorney’s Office in Charlotte says. Their lure was Zloop, an electronic waste recycling firm that the pair founded in 2012 and started marketing to franchisees that same year.
Boston’s inducements failed to mention a checkered past, which included bankruptcies and fraud, prosecutors say. Boston also had been found liable for submitting false documentation to acquire an earlier $2.9 million line of credit.
According to court records, Boston was only getting started.
At first, he planned to use money from Zloop’s investors to pay off a $4 million debt to another lender.
But he and LeBarge began diversifying in 2013, spending some $1.5 million on personal homes and condominiums. They used $800,000 in company money for a private plane; $400,000 on cars, and another $300,000 on travel, dining and sporting events. Due to Boston’s maneuvering, Zloop spent more on Justin’s racing career than its entire operational revenue combined, prosecutors said.
In 2013, when Zloop investors demanded the return of their money, according to court documents, Boston swindled another investor into securing a $14 million line of bank credit.
Boston and LeBarge, according to prosecutors, used about a third of that amount to buy the plane, a new Corvette and Grand Cherokee, and almost $80,000 on a suite to watch Panthers games at Bank of America Stadium.
Justin Boston signed to drive trucks for Kyle Busch Motorsports in 2015, according to published reports. But he lost his ride after nine races. Eventually, the Busch team sued Justin and Robert Boston, along with Zloop – accusing them of missing $650,000 in agreed-upon sponsorship payments
In October, a jury ordered Justin Boston to pay KBM more than $450,000 – sponsorship money that the Bush team had returned when Zloop declared bankruptcy.