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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of California

FOR IMMEDIATE RELEASE
Tuesday, January 21, 2014

Los Gatos Man Sentenced To Two Years For Conspiracy To Commit Mail And Wire Fraud, And Conspiracy To Commit Bank Fraud

SAN JOSE – David Foley, the former chief technology officer of Santa Clara, California video game developer Global VR, and former owner of NexTune Corporation, d/b/a UltraCade Technologies, was sentenced today to two years in prison and ordered to pay a $5,000 fine for engaging in a conspiracy to commit mail and wire fraud, and conspiracy to commit bank fraud, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

Foley, 48, of Los Gatos, pleaded guilty on January 6, 2012 to one count of conspiracy to commit mail and wire fraud, in violation of 18 U.S.C. § 1349, as charged in a superseding indictment filed on January 9, 2009, and one count of conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349, as charged in an indictment filed on August 18, 2011. The charges contained in the separate indictments were consolidated for the guilty pleas.

In his plea agreement, Foley admitted that he manufactured thumb drives, known as “game packs,” containing video gaming software that could be loaded onto arcade video game machines made for the home market. Foley illegally produced the products from his home while working as the chief technology officer of Global VR, which had previously acquired all rights to produce and sell games under the UltraCade name. After producing the game packs, Foley sold the products to a co-defendant located in Milford, Conn., and agreed to sell the game packs to the public using packaging and advertisements that falsely represented the goods to have been genuinely manufactured by UltraCade. Foley thereafter received payment for the illegally manufactured game packs by mail and wire.

Foley further admitted that he defrauded Countrywide Home Loans (now owned and operated by Bank of America) of mortgage and home equity line of credit loans in the amounts of $2,624,475 and $374,925. He did this by falsely claiming that he was still employed at Global VR. Foley had been fired from his job by the time the loan applications were submitted. Foley admitted that he instructed a co-defendant to contact Countrywide Home Loans to falsely confirm his continued employment after his employment had been terminated and prior to receiving the funds.

The sentence was handed down by the Honorable Edward J. Davila, United States District Court Judge in San Jose. Judge Davila also sentenced the defendant to a three-year period of supervised release. The defendant will begin serving the sentence on March 27, 2013.

Hanley Chew, Susan Knight, and Richard C. Cheng are the Assistant United States Attorneys who prosecuted the case with the assistance of Laurie Worthen and Tracey Andersen. The prosecution was the result of an investigation by the Federal Bureau of Investigation.

(Foley indictment 11-00554 )

(Foley indictment 09-00670 )

(Foley superseding indictment 09-00670 )