Santa Ana, California - A former Southern California resident was charged today with defrauding more than 100 investors out of $14 million by using boiler room tactics to fraudulently offer a “pre-IPO” investing opportunity in his online streaming and entertainment company, then using much of the funds to support his lavish lifestyle.
Ronald Shane Flynn, a.k.a. “Ronnie Shane,” 57, who formerly resided in Santa Monica and Orange County and is believed to be residing abroad, was charged in a federal grand jury indictment with 15 counts of wire fraud.
According to the indictment, Flynn was the founder and operator of Vuuzle Media Corp., which purported to be a streaming media business with offices in New York, Las Vegas, the United Arab Emirates, the Philippines, and other locations throughout the world.
From September 2016 to the present, Flynn falsely represented to investors that Vuuzle was a pre-IPO (initial public offering) investment opportunity that would provide high returns when it went public. To raise investor money, Flynn, through Vuuzle, hired a salesforce to solicit investors to purchase Vuuzle stock, according to the indictment. Although Vuuzle’s paperwork with federal securities regulators indicated Vuuzle would pay no commissions, Flynn allegedly paid large commissions to his salesforce and independent stock promoters.
Flynn also falsely told investors that their money would be used to operate and build Vuuzle’s online streaming business, as well as to take the company public, and he promised investors they would receive dividend payments from their investments in Vuuzle, according to the indictment.
Based on Vuuzle’s U.S.-based bank account and filed tax returns, Vuuzle never made a profit, and Flynn did not intend to conduct an IPO for Vuuzle, the indictment alleges. Because Vuuzle did not have audited financials, it could never make a public offering on any public stock exchange, and, since its inception in 2016, Vuuzle has never paid dividends to any investor, according to the indictment.
Out of the $14 million raised in investor funds, Flynn allegedly took a large portion of investor money to support his lavish lifestyle, including purchases at resorts and jewelry merchants, using an American Express credit card paid for by Vuuzle.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of all charges, Flynn would face a statutory maximum sentence of 300 years in federal prison.
In January, the Securities and Exchange Commission sued Flynn and Vuuzle in federal court in New Jersey, alleging violations of federal securities laws.
The FBI investigated this matter.
Assistant United States Attorney Jennifer L. Waier of the Santa Ana Branch Office is prosecuting this case.