The president of a Burnsville-based company that sold air-quality monitors was sentenced June 28 to 22 years in prison for orchestrating a multimillion-dollar investment fraud scheme.
Assistant U.S. Attorney Gregory G. Brooker announced the sentencing of Bryan Reichel, 62, of Prior Lake, founder and former president and CEO of PureChoice Inc. He was found guilty by a federal jury on 11 of 12 counts in a November 2016 indictment.
“Reichel operated PureChoice solely for his own benefit,” Brooker said. “For 18 years straight, through lies, misrepresentations and schemes, Reichel defrauded investors out of millions of dollars simply to enrich himself. Today’s 22-year sentence appropriately underscores Reichel’s momentous and multifaceted criminal conduct.”
Reichel also engaged in bankruptcy fraud by concealing assets from the court, said a news release from the Minnesota district of the U.S. attorney’s office.
As proven at trial, beginning in 2003 until 2011, Reichel solicited investments in PureChoice by falsely representing to investors that the money would be used to fund the company‘s operations. As part of the scheme, Reichel stole millions from investors by lying about the company’s success and concealing that PureChoice faced defaulted debt with no ability to pay.
He used the money to pay off company debts and other investors and made payments to himself, the attorney’s office said. He also made false statements to investors and prospective investors about the company’s agreement with 3M. Reichel stated that PureChoice was working to expand its existing relationship with 3M, when in fact he had received notice from 3M of its intent to allow its agreements with PureChoice to expire.
By June 2010, several of Reichel’s victims had demanded immediate payment of millions of dollars they had “invested.” To avoid repayment and protect his assets, in April 2011 REICHEL filed for bankruptcy, giving rise to an automatic stay and thereby preventing lawsuits and judgments from being entered by the victims. As part of the scheme, he made false statements in his bankruptcy case in order to conceal numerous items of personal property and thousands of dollars in personal accounts.
Reichel was convicted on seven counts of wire fraud, three counts of bankruptcy fraud and one count of making a false statement under penalty of perjury. He was ordered to pay $22.3 million in restitution to victims.