US tech entrepreneur Robert Alexander is facing serious consequences for his actions revolving around gambling with business funds of Kizzang, a company he founded. The Securities and Exchange Commission has charged Alexander with embezzling company money to spend it at casinos and pay credit card debt.
As the owner of Kizzang, a sweepstakes-based online gaming company, Alexander used the business as his personal money source. He has reportedly spent a minimum of $1.3m (£1,036,732.09) of company funds for personal use, including gambling.
Court documents show that Alexander spent just over $400,000 (£318,994.49) to gamble at casinos with money that came from the business. He used an additional $579,000 (£461,744.52) to pay his personal credit card bills. Alexander also gave his daughter money to pay for a BMW as well as for her tuition at the Culinary Institute of America.
Lying to investors
Further documents show that Alexander lied about helping to create the “Grand Theft Auto”. He also told investors he had used millions of his own money to create Kizzang, and that he had donated $50m (£39,874,311.14) to a hospital in Los Angeles.
A total of 53 individuals believed Alexander enough to invest in Kizzang to equal around $9m (£7,177,843.31). According to a former employee of the company, one investor had asked to pull out and was refused. The FBI began an investigation soon after the investor tried to leave the company.
A former employee of Alexander said: “He had the gambler’s mentality. Robert prided himself on comebacks in the casino and thought he could manage one in his business.”
Gambling for decades
Alexander made his way in the tech world by being involved with the firm Take-Two Interactive. The company was the brains behind the popular video game “Grand Theft Auto” in the late 1990s. The entrepreneur quickly became $30m (£23,920,959.28) richer after Take-Two purchased Jack of All Games, a company Alexander was associated with.
Having earned millions from the Jack of All Games sale, Alexander used the money for Las Vegas high-stakes gambling. According to relatives, he would win big and lose big. As part of his gambling habits, Alexander would borrow from people he knew and avoid paying the money back.
In 2013, Alexander created the idea of Kizzang, the brand that is now associated with the embezzlement charges. According to employees, the idea of the sweepstakes online gaming business never caught on. Eventually, the company ran out of funds to help gain new customers.