Imagine if you could find the guaranteed cheapest prices online – and that you could get in on the ground floor of a mobile app that made it possible for shoppers to save money with every click.
Developing a shopping app is not a crime. But spending investors’ money on personal expenses is, and that’s the crime the Feds lodged against a 47-year-old South Florida man.
The Justice Department brought the case against Isaac Grossman, whom they said pled guilty to wire fraud, mail fraud, and money laundering charges. Today, he was sentenced for what they called a “Multi-Million Dollar Investment Scam Targeting the Elderly, and Spending Investor Money on Gambling, Jewelry, and Luxury Vehicles.”
As someone covering ecommerce, it’s fascinating to read what the Feds wrote about the defendant’s shopping app in today’s press release:
“From September 2014 through April 2018, Grossman raised approximately $2.4 million in investor funds for his company, Dragon-Click Corp., by soliciting investments from elderly retirees nationwide.
“Grossman told potential investors that Dragon-Click was developing an internet application that would revolutionize internet shopping by allowing a user to upload a photograph of any item the user wanted to purchase, identify all retailers offering that item for sale, provide price comparisons for that item across retailers, and provide a link to retailers’ websites where the user could purchase the item.
“Grossman solicited funds by falsely telling potential investors they would double, triple, or quadruple their investments, and that Dragon-Click was on the verge of being sold to a large technology company, such as Google, Apple, or Amazon, for over $1 billion.”
According to the July press release from the Department of Justice, the defendant faced 50 years for the crimes he admitted to; today’s sentence: 7 years in federal prison.
Online publication Vice did an in-depth article about the Feds’ case against the app developer back in 2019, including conducting interviews with some of the investors in his company. Vice reported that after pivoting to online retail in about 2013: “Over the next four years, he spent some investor funds on developing the Dragon-Click application, Apple and Android certificates, applying for patents and paying employee salaries, Grossman testified during a March 15, 2018 hearing with Miami SEC regulators.”
But the article also says federal law enforcement charged him with spending investors’ funds on a lavish lifestyle, alleging he gambled away $461,000 at a nearby casino, for example.
The Vice article makes for interesting, albeit uncomfortable, reading. But what’s left unsaid is the fate of the shopping app – is such a tool really capable of helping shoppers find the lowest prices, or was it simply too good to be true?
