The federal government appears in no rush to put video game-promoter and Las Vegas casino high roller Robert Alexander behind bars nearly two years after he pleaded guilty to fraud charges in connection with his multimillion-dollar Kizzang investment scam.
Alexander, 51, on Wednesday saw his sentencing date moved to at least Aug. 16 in U.S. District Judge Andrew Carter Jr.’s courtroom in New York’s Southern District. He pled guilty to securities and wire-fraud charges in January 2020, admitting to bilking investors in his online gaming company, which claimed to be developing a gambling-style online sweepstakes platform.
According to an SEC summary in connection with the Alexander investigation, from February 2013 until at least mid-2017 Alexander raised an estimated $9 million from 53 investors in Kizzang, LLC. He falsely told investors the money would be used to further the business. Instead, he burned it up living the life of a Las Vegas high roller.
Per the SEC: “Alexander used Kizzang bank accounts as his personal piggybank, misappropriating at least $1.3 million to pay for, among other things, his daily living expenses, his daughter’s culinary-school tuition, his mortgage and car payments, and his gambling habit.”
At the time of his guilty plea, U.S. Attorney Geoffrey Berman made Alexander sound like a pretty bad actor.
“Alexander betrayed his investors and spent their funds to support his lifestyle, including gambling excursions to multiple casinos and a luxury car for one of his family members,” Berman said. “Robert Alexander now faces serious time in prison for gaming his investors.”
Get it? A game designer was gaming his investors?
But a two-year delay in sentencing is starting to look like Alexander is gaming the system. Each conviction carries a maximum 20-year sentence and a hefty fine, but that much hard time is unlikely.
It felt even less likely after listening Wednesday to a status check in the case. After long delays due to COVID-19 concerns, Alexander’s attorney Brian Jacobs explained his client is scheduled for a February cornea transplant and will be unable to travel to attend his sentencing hearing until at least mid-August. The prosecution and judge agreed to the delay, which is also not all that out of the ordinary in the pandemic era.
But I have to wonder what some of his investor victims are feeling after learning he’s continued to spend time in Las Vegas casinos when he ought to be figuring out a way to repay them for the millions they invested. Longtime Las Vegas casino man Bobby Baldwin was one of his victims.
Alexander can see the bright lights of Las Vegas, but can’t see his way clear to pay back what he owes.
Alexander called his Kizzang LLC a “new media sweepstakes company,” according to government documents, one that offered digital-sweepstakes entertainment via mobile devices, social media, and on the internet in the form of free games, scratch games, parlay cards, and slot tournaments with the chance to win cash and other prizes. Profits would be generated through advertisements and sponsorships.
Sports Illustrated was one of those sponsors. Photos of Alexander posing with SI swimsuit models aren’t hard to find online. In the end, Sports Illustrated sued Alexander, winning $1.025 million in a default judgment.
The trouble signs weren’t hard to find for those willing to look. He conned investors into backing his company, but didn’t bother to pay some of his employees’ wages, health care, and unemployment taxes. They filed claims against him and prevailed, for whatever that was worth.
Worse yet, Alexander pretended to invest millions in the company and even let it be known to a Kizzang investor that he had donated $50 million to a “prominent Los Angeles hospital,” according to the SEC.
The reality?
“Alexander did not personally invest millions of dollars in Kizzang,” the SEC stated in a document, “and did not donate any funds, let alone $50 million to the Los Angeles hospital.”
It was just one more game in the life of a guy who has made millions playing them.
Alexander gained credibility after selling a video game to the company that created “Grand Theft Auto.” He plowed through the $30 million windfall chasing the action at the tables and a high-rolling lifestyle as he promoted his latest venture, Kizzang.
Soon he was blowing through their money, too.
Real estate investor Eric Fessler lost $200,000 in the Kizzang scam.
Kessler told the New York Post, “You can’t believe what he says. He’s not an honorable person.”
By now, that should be clear enough for everyone to see.
