Updated December 6, 2019
Around 10 months after a grand jury handed down indictments against the founders of the Starship Snacks company, Barry Schwartz, 72, pled guilty to one count of conspiring to commit securities fraud and wire fraud in Manhattan federal court.
Under a plea deal with the government, Schwartz agreed to a sentencing range of 41 to 51 months in prison, a fine of $15,000 to $150,000, and restitution of $2,163,214. The government agreed to drop all other charges pending against him.
Schwartz is scheduled to be sentenced on December 12, 2019.
At the plea hearing, Schwartz admitted that he agreed to make material false statements in connection with a private offering of securities in Starship, and that he knew what he was doing was illegal.
The criminal complaint against Barry Schwartz
According to the criminal complaint from October 2017, Starship was formed to develop and market caffeinated chocolate snacks. Schwartz’s wife Lisa Bershan was the CEO, President, and founder, Schwartz was the Secretary, and Joel Margulies was an employee and marketing expert.
The trio raised more than $2 million from investors based on misrepresentations including that investments in Starship were guaranteed against losses, that Starship was in talks to be acquired by Monster Beverage Corporation, and that Starship had successfully developed its signature product.
In October 2016 Schwartz hosted a conference call with investors where he stated that Starship had received an offer from Monster but Bershan had rejected it and they were continuing to negotiate with Monster. According to the government, Starship was never involved in negotiations with Monster.
Schwartz and Bershan also allegedly used investor funds for personal expenses including plastic surgery, pet care, rent for an apartment in Manhattan, and a down payment on a home in Florida.
Read an earlier post about the case here.
All American Pet Co.
Schwartz, Bershan, and Margulies were also involved in another company called All American Pet Co. Schwartz was the company’s CEO. According to the government, Starship and All American Pet Co. were similar fraudulent schemes.
The other defendants
Bershan and Margulies each pled not guilty to charges of securities fraud, wire fraud, and conspiracy to commit securities and wire fraud in October 2017.
Update: Bershan pled guilty on December 18, 2018, and was sentenced on November 22, 2019. Margulies was convicted on August 13, 2019.
One reply on “Barry Schwartz pleads guilty to securities fraud conspiracy charge”
Lisa and Barry are total thieves and deserve to spend the rest of their days behind bars. They have no respect for anyone’s hard earned money and think they should live the high life. I wish I could have been in the courtroom!