JACKSONVILLE, Fla. — Jason Cory, the ousted CEO of a company that was once awarded city and state incentives, has been indicted for wire fraud and has a warrant issued for his arrest, according to court records.
Cory's attorney, Todd Foster, told the Business Journal on Monday that Cory will be surrendering voluntarily to the FBI and intends to plead not guilty.
"We disagree that there's any crime here," Foster said. "This will be a fully contested case."
Cory founded and led SharedLabs, a company that grew rapidly by buying a number of IT, staffing and digital marketing firms – acquisitions paid for with equity in SharedLabs and high-interest loans. Cory promised a fast path to a SharedLabs initial public offering, but after multiple applications to the Securities and Exchange Commission, Cory ultimately stopped trying for an IPO.
Cory then attempted to take SharedLabs public through the acquisition of Colorado-based Glowpoint Inc., which was already publicly traded. However, Cory was forced out of SharedLabs weeks before Glowpoint's shareholders were to vote whether to approve the acquisition.
A Business Journal investigation at the time uncovered SharedLabs documents that accused Cory of embezzling more than $300,000 through a company called Gambit Matrix, paying himself bonuses totaling $200,000 and buying himself expensive things, such as Super Bowl tickets, while the company struggled to make payroll. An FBI investigation began soon after the company's review, the Business Journal reported at the time.
Cory denied the company's allegations at the time. U.S. attorneys, however, agree with at least some of SharedLabs' findings, including that he embezzled funds using Gambit.
Cory's July 22 indictment in the U.S. District Court for the Middle District of Florida accuses him of three counts of wire fraud and one count of illegal monetary transaction. The counts refer to three transfers of about $5,500 each and an $11,630 purchase of a gold Rolex watch using "criminally derived" funds.
The indictment states "Gambit never performed any legitimate, substantive business activities" and was used "to receive fraudulently obtained payments ... for consulting services purportedly performed by Gambit." It calls Gambit "a shell company controlled by Cory to receive embezzled funds."
The indictment accuses Cory of doubling down on his "scheme and artifice to defraud" once board members and executives raised questions about Gambit. When asked, Cory allegedly denied he had any controlling interest in Gambit; he also allegedly created fake email accounts and social media profiles for fictitious owners of Gambit and falsified a company invoice and contract.
Foster told the Business Journal that Cory disputes the claim that the payments were fraudulent.
"The government has been given some bad information," Foster said.
The government is demanding Cory forfeit $547,000 – the total prosecutors said he made from wire fraud – plus the $11,630 used to buy the Rolex watch, which the indictment calls a "money laundering offense."
SharedLabs was founded in Jacksonville in 2017. After less than a year in business, the company threatened to move its headquarters from Jacksonville unless it received incentives to stay.
The Business Journal previously found that Gambit contributed $8,000 – along with $1,000 from SharedLabs and $1,000 from Cory – to Mayor Lenny Curry's re-election campaign while the company was in the process of obtaining the incentives.
The Business Journal also previously uncovered lawsuits relating to other Jacksonville-based companies Cory founded, including Atherio Inc. and Corsys Technology Group.
In a civil suit, Cory was accused of using Atherio as his personal piggybank. Cory denied the allegation, and a judge dismissed the suit.
In one suit against Corsys, Cory was accused of defaulting on payments to the founders of a company Corsys acquired, ultimately reaching a confidential settlement agreement. However, Cory later defaulted on payment of the settlement, and was ordered by the court to pay more than $183,000. Cory denied breaching any agreement.
In a separate suit against Corsys, Cory is accused of defaulting on $98,000 of a $100,000 loan. In June, a judge ruled that Corsys and Cory were in default "for failure to serve or file any paper as required by law."
The wake of Cory's exit from SharedLabs was expensive for the company, which has since rebranded as RiseIT Solutions. In short order, the company forfeited $535,000 in incentives, lost its go-public merger with Glowpoint and purged its executive team.
Earlier this year, Datagrazp Inc. filed suit against SharedLabs, seeking $186,000 that Datagrazp says SharedLabs owes for work completed from 2018 through 2019. SharedLabs has countersued for breach of contract, claiming that some of the invoiced work was never performed and that Datagrazp used SharedLabs' confidential client list to poach a contract with a SharedLabs customer.
Cory was succeeded as CEO at SharedLabs, now RiseIT Solutions, by Kishore Khandavalli, the CEO of the largest company SharedLabs acquired under Cory.