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Department of Justice
U.S. Attorney’s Office
District of Minnesota

Friday, November 4, 2016

Federal Jury Finds PureChoice Founder Guilty Of $25 Million Dollar Investment Fraud Scheme

The United States Attorney’s Office for the District of Minnesota today announced the conviction of BRYAN REICHEL, 61, founder and former principal shareholder of PureChoice, Inc. (PureChoice), for orchestrating a multi-million-dollar investment fraud scheme. On July 21, 2015, REICHEL was charged in a 12 count superseding indictment with Wire Fraud, Bankruptcy Fraud, Concealment of Bankruptcy Estate Property and making a False Statement Under Penalty of Perjury. On November 3, 2016, following a four-week trial, a federal jury found REICHEL guilty on 11 of 12 counts. 

After the verdict, the prosecutors, Assistant U.S. Attorneys David J. MacLaughlin and Joseph H. Thompson, wrote: "This case is an excellent example of a jury’s ability to cut through complexity to the truth. The jury rejected the defendant's false and callous argument that the main victims in this case, who lost over $12 million to Reichel’s scheme, were corporate raiders who had themselves victimized Reichel. Reichel’s decade-long fraud scheme was not lost on this jury, and the United States thanks them for their service.”

“The guilty verdict of Bryan Reichel illustrates how federal law enforcement works together to help put an end to the criminal behavior of those who commit investment and bankruptcy fraud schemes,” stated Special Agent in Charge Shea Jones of the IRS Criminal Investigation St. Paul Field Office. “Today, Justice is served, and Bryan Reichel is being held accountable for his fraudulent and deceptive actions that continued for too many years. Let this conviction serve as a warning to those who are considering similar conduct.”

"As evidenced by this verdict, the FBI, along with its law enforcement partners, remains committed to combatting financial crime. The FBI will continue in its efforts to protect innocent people from becoming victims of financial crime by continuing to pursue those who commit these crimes," said FBI Special Agent in Charge for the Minneapolis Division Richard T. Thornton.

“Postal Inspectors take very seriously their mission to deter the illegal use of the mails for any criminal activity,” said Postal Inspector in Charge, Craig Goldberg. “We are committed to working together with our law enforcement partners to identify, investigate and bring to justice those who would attempt to mask their criminal activity through the use of the mail.”

As proven at trial, beginning in 2003 until 2011, REICHEL solicited investments in PureChoice by falsely representing to investors that the money would be used to fund the operations of PureChoice, a Burnsville-based company that sold air quality monitors. As part of the scheme, REICHEL stole millions of dollars from investors by lying about the success of the company and not disclosing the fact that PureChoice’s main product did not comply with federal regulations.

As proven at trial, in October 2004, REICHEL solicited a $500,000 loan to PureChoice from Victim PH to “bridge the gap” and continue funding company operations until the completion of a private stock offering in early 2005. Rather than using the money to fund PureChoice operations, REICHEL paid settlement agreements, a breach of contract lawsuit and an overdue loan that the company was responsible for.

As proven at trial, in September 2005, REICHEL solicited a short-term $500,000 “bridge loan” from Victim RB to PureChoice by falsely representing that the money would be used to fund operations until the company received additional financing and investments. Immediately after receiving the loan, REICHEL paid $70,000 to himself and made more than $200,000 in payments toward earlier unpaid loans. In March 2006, REICHEL again asked Victim RB to provide money to fund PureChoice operations, this time in the form of a $3 million line of credit which PureChoice could access through a series of $500,000 loans. Between 2006 and 2009, REICHEL several times requested Victim RB to increase the amount, ultimately obtaining more than $5 million in loans for PureChoice from Victim RB. REICHEL used a significant portion of the money to pay off earlier investors, make interest payments to Victim RB, and to make preferential payments to himself.

As proven at trial, between April 2007 and August 2007, REICHEL sold Victim GA $900,000 worth of PureChoice stock, falsely representing that the funds would be used to purchase manufacturing components and pay for operational expenses. Instead, REICHEL used the funds to purchase stock in other companies and pay personal credit card debt. In May 2008 and July 2008, REICHEL asked Victim GA to provide PureChoice with loans in the amount of $800,000 and $200,000, respectively, stating that the funds were needed to “bridge the gap” until the next round of funding was complete. Again, REICHEL used the majority of the funds for personal use, including the purchase of stock in other companies and paying off thousands of dollars in credit card debt.

As proven at trial, on November 14, 2008, REICHEL sent a sales and marketing update to PureChoice investors and prospective investors in which he made false statements about the company’s corporate agreement with 3M. In the update, REICHEL stated that PureChoice was “currently working to expand [its] existing relationship” with 3M, when, in reality, REICHEL had received notice from 3M of its intent to allow its agreements with PureChoice to expire.

As proven at trial, in September 2009, REICHEL asked Victim GA and Victim DA to provide a $1.5 million loan to PureChoice to purchase manufacturing materials so the company could meet projected sales goals and hire additional staff. In order to secure the loan, REICHEL again misrepresented the company’s relationship with 3M and expressly stated that the funds would be used to purchase products from suppliers. Over the course of four transactions, REICHEL obtained a $1.5 million loan from Victim GA, of which a significant portion was used to pay off earlier investors in PureChoice and to transfer more than $600,000 to himself.

As proven at trial, by June 2010, several of REICHEL’s victims had demanded immediate payment of millions of dollars. To avoid repayment and protect his assets, in April 2011, REICHEL filed for bankruptcy in the District of Minnesota, giving rise to an automatic stay and thereby preventing lawsuits and judgments from being entered by the victims. As part of the scheme, REICHEL made false statements in his bankruptcy case in order to conceal numerous items of personal property and thousands of dollars in personal accounts.

This case is being prosecuted by Assistant U.S. Attorneys and David J. MacLaughlin and Joseph H. Thompson.

This case is the result of an investigation conducted by the United States Postal Inspection Service, the Internal Revenue Service-Criminal Investigations, and the Federal Bureau of Investigation.


Defendant Information:


Prior Lake, MN


  • Wire Fraud, 7 counts
  • Bankruptcy Fraud, 3 counts
  • False Statement Under Penalty of Perjury, 1 count





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    United States Attorney’s Office, District of Minnesota: (612) 664-5600


Updated November 7, 2016