- The founder of Exit 7C pled guilty to three counts of wire fraud on Wednesday.
- Blessing Egbon admitted he used investors' money for "personal purposes."
- Egbon faces a penalty of 20 years in prison for each charge, as well as a separate lawsuit from the SEC.
The founder of Exit 7C, a Milwaukee-based fuel company, pled guilty on Wednesday to defrauding investors out of over $6.2 million.
Blessing Egbon, 35, admitted to three counts of wire fraud, according to a plea agreement filed in the US District Court for the Eastern District of Wisconsin and first reported by Freight Waves. The Exit 7C founder was accused of giving investors false revenue and profit numbers, as well as using nearly a third of investor's funds to charter private jets, rent villas, visit nightclubs, and make "payments" to himself.
The fuel company, which was founded in 2015 as CoOp Fuels, provided bulk fuel to gas stations throughout the US, offered maintenance to service vehicle fleets, as well as created a digital fuel card that allowed users to buy gas via a mobile app. The company dissolved in 2020, just a few months after Exit 7C's board of directors investigated Egbon and asked him to resign as CEO, according to the court documents.
Federal prosecutors alleged that between 2018 and 2019 Egbon claimed Exit 7C's sales revenue was over $91 million, when it actually averaged $348,000, according to the court document United States of America V. Blessing Egbon.
In August, the US Securities and Exchange Commission filed a separate civil lawsuit against Egbon. The lawsuit alleges that Egbon forged bank statements, emailed current and potential investors monthly newsletters that contained "false information regarding Exit 7C's finances and growth" and gave presentations to investment firm with "fictitious" financial information from 2018 to 2020.
The suit said Egbon used much of investor's funds to "subsidize his own lifestyle and personal expenses," through chartering a private jet to fly to a luxury villa he had rented in Arizona, as well as using the funds to buy "large amounts of alcohol" at the onset of the pandemic.
The SEC suit says Egbon spent over $530,000 on visits to "luxury nightclubs," over $269,900 on chartering private jets, and $62,500 on renting villas in addition to spending "hundreds of thousands of dollars on day-to-day living expenses."
A jury trial to decide the SEC lawsuit scheduled for August.
Egbon and his attorney, Michelle Jacobs, did not respond to a request for comment from Insider.
Subsequent to the plea agreement with the state, Egbon faces a maximum penalty of 20 years in prison, as well as a $250,000 fine for each of the three charges. He has also agreed to pay restitution to at least 11 former investors.