SAN FRANCISCO—Dressed in matching yellow scrubs from the nearby Alameda County Jail, Jon Mills looked resigned to his fate. After taking a plea deal on two felony counts of wire fraud, the young former startup CEO appeared in federal court Tuesday afternoon for sentencing.
Mills had moved to California five years ago with a dream to hit it big in Silicon Valley. The company he founded, Motionloft, uses small sensors to perform analytics on in-store foot traffic. Everything worked. The company continues to succeed, and celebrity venture capitalist Mark Cuban remains its sole investor.
But that success wasn’t enough. In early 2013, Mills told at least five people that if they gave him relatively small amounts of money, they would own stakes in the company. He claimed that a Cisco acquisition worth hundreds of millions of dollars was supposedly imminent, so Mills and all Motionloft shareholders others would stand to make a tidy profit. In reality, Mills knew the deal didn’t exist.
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