On Monday federal prosecutors announced that a Los Gatos, California game developer pled guilty to several charges including conspiracy to commit mail fraud, conspiracy to commit wire fraud, and conspiracy to commit bank fraud. Speaking to the San Jose Mercury News, the former owner of UltraCade Technologies said that some of what the government announced on Monday was "inaccurate."
46-year-old David Foley said that he agreed to sell his company in 2005 to Global VR in San Jose. According to Foley, the deal, worth $1.4 million in cash, included a provision for Foley to join the company as its chief technology officer.
U.S. Attorney Melinda Haag said that after Foley took the job at GlobalVR, he continued to produce and sell game packs that could be loaded onto UltraCade home arcade machines. Haag said that this was "illegal," because Global VR had acquired all the rights to produce and sell games.
But Foley countered by saying that Global VR bought nonexclusive rights to the UltraCade name and did not take possession of it, ultimately backing out of the deal in January of 2006.
"I felt like if they're not going to do the deal, I still need to make a living," said Foley.
Foley also told the newspaper that he had been initially charged with 54 counts of counterfeiting but agreed to plead out to conspiracy charges last week because "technically, I was selling them as UltraCade products, and UltraCade no longer existed."
Foley added that he remained an employee of Global VR as chief technology officer even after the deal fell through, but was fired when they found out that he was selling the game packs.
This leads us to the final charge Foley copped to: bank fraud. According to federal prosecutors from the U.S. Attorney’s office, Foley claimed he was still employed at Global VR when he filed several loan applications. But before those loans closed escrow he had been fired and never disclosed this fact to the bank. He claims that he told his lender about it after it happened.
"I want to make it clear that I accept responsibility for the things I did," said Foley. But in the breath he says that the government's news release misstates the facts contained in the plea agreement that he signed. Foley is currently free on $100,000 bond and will return for sentencing on April 30. For all of the crimes that he pled to, Foley could face a total maximum of 50 years in prison and $1.25 million in fines.
Global VR and the U.S. attorney's office did not respond to this story.