Scot Zarkiewicz, the co-founder and former CEO of Iselin, N.J.-based SingleClick Systems was sentenced to 63 months in prison for stealing $6.3 million from 35 different investors between 2009 and 2013.
According to the FBI, Zarkiewicz, 41, solicited investors to buy millions of dollars of privately held SingleClick stock based primarily on "fraudulent misrepresentations" of the company's operations and financial performance.
"With today's sentence, Scot Zarkiewicz is being held to account for misleading investors and betraying their trust with his multimillion-dollar fraud scheme," Manhattan U.S. Attorney Preet Bharara said in a statement.
SingleClick is a privately held software company that provides businesses with network software products that facilitate content access and network and systems management from any internet-connected device.
In addition to the prison sentence, U.S. District Judge Denise L. Cote also sentenced Zarkiewicz to three years of supervised released and ordered him to forfeit $5.5 million as well as any remaining proceeds in SingleClick bank accounts. He was also ordered to pay more than $6.3 million in restitution to his victims after pleading guilty to securities and wire fraud charges in November.
According to investigators, Zarkiewicz told would-be SingleClick investors, in both oral and written communications, that the company had several large corporate clients, millions of dollars in annual revenue and millions more in cash deposited in banks and brokerage accounts.
"In truth and fact, and as Zarkiewicz well knew, SingleClick conducted minimal business operations, collected significantly less than a million dollars in annual revenue and did not have more than approximately $513,000 in cash on hand," according to the FBI statement.
By the summer of 2013, some investors learned that the company actually had very little cash available and then confronted Zarkiewicz. Zarkiewicz then admitted that he lied about the company's performance, fabricated records and misled investors about the number of investors in SingleClick before resigning in August.
SingleClick Systems officials were not immediately available to comment on the sentence.