Tech startup founder admits to stealing $4.2M to buy Mercedes, mansion: DOJ

SACRAMENTO - A Fresno man who allegedly siphoned $4.2. million from investors and the federal government through his tech startup so he could buy a Mercedes and a mansion among other luxurious purchases pleaded guilty to wire fraud and money laundering charges, the Department of Justice announced this week.

Royce Newcomb, 62, was the owner of Strategic Innovations - a tech startup company that allegedly made smart home and business products meant to stop package theft, prevent weather damage to packages, and make it easier for first responders and delivery services to find homes and businesses, according to court documents. 

"Newcomb developed prototypes of his products and received local and national media attention for them. For example, Time Magazine included his eLiT Address Box & Security System, which used mobile networks to pinpoint home and business locations, on its Best Inventions of 2021 list," court documents revealed.

According to the DOJ, Newcomb cheated investors out of their money with false representations that included an award granted by the National Science Foundation. Newcomb claimed he would use the money to further develop his products to bring them to market. 

Instead, Newcomb used the money to pay for gambling, a Mercedes and Jaguar, and a mansion. He also used the money to pay for refunds to other investors who wanted out, and to pay for new, unrelated projects, according to court documents.

At the same time, Newcomb also received a fraudulent COVID-19 loan for more than $70,000 from the Small Business Administration and fraudulent loans for more than $190,000 from private lenders, officials said. 

Newcomb alleged to the federal government that Strategic Innovations had millions of dollars in revenue to get those loans, court documents revealed.

Newcomb was previously convicted federally in 2011 for running a real estate fraud scheme in Sacramento. He was sentenced to more than five years in prison for that offense, and he was on federal supervised release for that offense when he committed the offenses charged in this case.

Newcomb is scheduled to be sentenced on May 5. He faces a maximum sentence of 20 years in prison and a $250,000 fine for the wire fraud charge, and 10 years in prison and a $250,000 fine for the money laundering charge.