The former CEO of a Nevada sports energy drink company, Xyience Inc., was convicted of tax evasion Monday after a weeklong bench trial before U.S. District Judge James Mahan.
Russell Pike, 50, of Las Vegas was convicted of one count of tax evasion for failing to pay taxes on more than
$7.9 million in income he earned in 2006.
Pike founded Xyience, which sold sports energy drinks, including Xenergy, in more than 45,000 stores throughout the United States.
The company once was a ringside sponsor of the Ultimate Fighting Championship, prosecutors said in opening statements at the trial.
The criminal case focused on Pike’s sale of 4.4 million shares of Xyience stock for $7.9 million in 2006, according to Nevada U.S. Attorney Daniel Bogden and John DiCicco, principal deputy assistant attorney general of the Justice Department’s Tax Division in Washington, D.C.
Pike had asked an investor who bought three million shares of stock for $5 million to change the date of the purchase agreement to 2007 so that Pike could avoid paying taxes in 2006, prosecutors alleged.
All the while, Pike was spending millions of dollars in 2006 maintaining a lavish lifestyle, which included buying and driving luxury cars and wagering at local sports books, prosecutors alleged.
Pike, who faces up to five years in prison and a $250,000 fine, is to be sentenced on July 2. He has four prior felony convictions, including two in Nevada for bank fraud and money laundering.
The case was investigated by Internal Revenue Service Criminal Investigation.
Contact Jeff German at firstname.lastname@example.org or 702-380-8135.