A 62-year-old Fresno man was sentenced to five years and 10 months in prison on Monday for orchestrating a complex fraud scheme that swindled $4.2 million from investors, lenders, and the federal government. Royce Newcomb, the owner of Strategic Innovations, a technology startup focused on developing smart home and business products, was convicted of wire fraud and money laundering charges. Between 2017 and 2022, Newcomb used his company to garner significant media attention, including a feature on Time Magazine’s Best Inventions of 2021 list. However, behind the scenes, he was using false representations to deceive investors. Newcomb claimed that the National Science Foundation had awarded him a grant and that investor funds would be used to further develop his products. Instead, he used the money for personal gain, including gambling, purchasing luxury vehicles like a Mercedes and Jaguar, and buying a mansion. He also used some of the funds to pay off earlier investors who were seeking refunds and to finance unrelated projects without investor approval. The Department of Justice revealed that Newcomb had previously been convicted of a real estate fraud scheme in Sacramento in 2011, for which he served more than five years in prison. At the time of the current offenses, he was still on federal supervised release. In addition to the wire fraud, Newcomb obtained a fraudulent COVID-19 loan of over $190,000 by falsely claiming that his startup had millions in revenue. The sentencing brings closure to a case that highlights the ongoing challenges of preventing fraud in the tech startup ecosystem.
