News and Press Releases

Dallas County Man Sentenced to 70 Months in Federal Prison in Investor Fraud Case

FOR IMMEDIATE RELEASE
March 17, 2014

Defendant Sold “Salad Bowl” Franchises in California and Texas

DALLAS — A Irving, Texas, man who pleaded guilty in April 2013 to one count of wire fraud stemming from his role as registered agent, director and incorporator of The Salad Bowl Franchise Corporation, was sentenced this morning by U.S. District Judge David C. Godbey.

Michael David Carroll, 38, was sentenced to 70 months in federal prison and ordered to pay $1,437,040 in restitution.  Judge Godbey ordered that Carroll surrender to the Bureau of Prisons by May 16, 2014.  U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made today’s announcement.

According to documents filed in the case, as well as testimony at today’s sentencing hearing, from November 2008 through September 2010, Carroll ran a scheme to defraud potential investors, and to obtain money and property under false and fraudulent pretenses, by fraudulently inducing investors to purchase a “Salad Bowl” franchise from him.

As part of the scheme to defraud, Carroll obtained funds from several investors by selling “Salad Bowl” franchises to investors in California and Texas.  He provided false financial data to investors including inflated daily and monthly sales figures at some franchise locations.  He also falsely represented to some investors that investment funds would be used only to fund franchise construction expenses and to purchase franchise restaurant equipment related to that investor.  Carroll, however, admitted that he co-mingled investor funds into his operating account and then used investor funds for his own personal use.

Carroll falsely represented to some investors that some franchise equipment at particular franchise store locations would be fully owned by the investor as part of a “turnkey operation,” when in fact, Carroll had only leased some of the franchise equipment.  He also fraudulently altered financial statements to represent falsely inflated sales to deceive potential investors about income generated by retail sales at franchise store locations.

Carroll admitted that he forged his business partner’s signature on a $23,000 loan secured by account receivables on a “Salad Bowl” restaurant.  He also admitted concealing his bankruptcy filings from several potential investors in order to deceive them about his true financial condition and history.

The FBI investigated the case and Assistant U.S. Attorney David L. Jarvis prosecuted.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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