Fraud charges shine spotlight on Fishers startup deal
Fishers officials are pressing ahead with incentives for a startup lighting company with bold plans to produce new energy-efficient products despite growing concerns about its background.
A Colorado man who VoxLumen officials say invented thetechnology that the company plans to develop here is going on trial in that state in May on charges of defrauding investors of more than $1.3 million. William Lindsey, 36, also faces charges of misleading investors about the status of his rights to the technology.
VoxLumen officials say Lindsey is a contracted consultant and that they acquired rights to the technology from him.
In January, the Fishers Town Council agreed to back VoxLumen's pursuit of $10 million in tax-exempt, low-interest industrial revenue bonds to buy equipment and improve the former Diamond Foods plant at 11899 Exit Five Parkway. Fishers would front $800,000 and be reimbursed through business personal property taxes on the new equipment over a decade.
Fishers officials are continuing to do due diligence and background checks on the company before agreeing to sign the paperwork to obtain the bonds, Fishers Town Council President John Weingardt said. But he thinks the town has adequate protections in place in case VoxLumen defaults.
"We are in a good position right now," Weingardt said. "We're still moving forward, but again, we're waiting to make sure the people we are working with don't have any issues."
Big plans for Fishers
VoxLumen is seeking $10 million to $15 million in private funds from investors with ambitious plans to launch the technology globally, even though it hasn't begun distributing it here yet.
Steven A. Ramos, chief executive officer of Littleton, Colo.-based Lumiere Industries, and John Bielefeld, the company's chief financial officer, said the company created VoxLumen as a sister business to produce the lighting technology in Fishers. The officials liked the town's business-friendly climate, and Ramos also lives in Fishers.
Ramos and Bielefeld have told Fishers officials that they hold several pending patents to produce a new line of commercial lighting products developed by Lindsey that they say are more energy-efficient than LED technology. They say it uses batteries the size of a Double A and can be used in business signs and lighting embedded in roads and runways.
VoxLumen entered into a partnership with local company AI Innovations to produce the lighting technology, and the company's 100 employees have moved from a now-closed Greenfield plant to VoxLumen's leased Fishers' facility.
AI Innovations President Frank Green said his company produces wholesale commercial-grade lighted signs, which ultimately are used by companies such as Panera Bread, Champs Sports and Finish Line.
Green said his company is manufacturing its traditional signs now at the Diamond Foods building through a sublease with VoxLumen but plans to help produce and distribute the new products when they are ready. He said he's excited about the opportunity despite the pending court case and some delays in the rollout and has been told that VoxLumen is waiting for more private investment.
"That was supposed to develop a little bit faster than it has," Green said. "With the delays, I've inquired as to what's the problem, what's going on."
Ramos told The Indianapolis Star he expects to land enough investments by summer to move forward.
Ramos also said the company has investigated the claims against Lindsey. VoxLumen, Ramos said, owns the rights to the technology free and clear. Lindsey still does research-and-development work for the company, Ramos said.
"We have had our challenges," Ramos said. "This has been one of them that has made my head hurt, but as CEO, I am responsible to make sure we are doing everything on the up and up. I would leave immediately if anything was illegal."
Indictment in Colorado
The Colorado attorney general's office launched an investigation against Lindsey in 2011-12 and subsequently filed five felony charges of securities fraud and three felony charges of theft. Lindsey and his public defender did not return several phone calls for comment.
Lindsey owned and operated several companies in Colorado that he set up to market and produce the technology, according to the Colorado indictment. Neither Lumiere Industries nor VoxLumen are named in the indictment.
According to the indictment, Lindsey took more than $1.3 million in 2011 and 2012 from four investors with promises that they each would receive a return on their investments.
Lindsey, however, generated no significant income from his business ventures, the indictment said. Prosecutors allege he deposited the investors' money into his personal bank accounts and used it to pay debts, other investors, court costs and payments for his own vehicles.
Lindsey owed thousands of dollars from civil and criminal cases that had been filed against him and his associated businesses in Colorado courts from September 2006 through October 2011, according to the indictment.
Lindsey, according to the indictment, also is involved in a dispute over whether he owns rights to the technology he claims to have invented.
Obert Aaberg, an 84-year-old farmer who lives in Rothsay, Minn., told The Star that he met Lindsey and several business partners after hearing of a can't-miss business deal and agreed to invest $100,000 in August 2011.
"They told me it's going to be a great deal, the greatest thing that's ever gotten started on this earth," Aaberg recalled. "They could light up the highways and the curbs and it would be the greatest deal on the earth. The billboards, they said, could run a whole year on a battery the size of a Double A."
Aaberg said he got carried away with the bad investment. Authorities, he said, told him Lindsey used the money, in part, to purchase snowmobiles.
"They're big liars," he said.
Who owns the technology?
Lindsey will go on trial May 19 to face those charges.
Ramos, a former global technology executive at IBM, says company officials are continuing to investigate the claims against Lindsey. In a few weeks, when that is finished, he said, they plan to complete the application with Fishers to acquire the bonds.
While the indictment disputes whether Lindsey ever owned the technology, Ramos said his company attorneys have investigated the claims and said he's been assured Lumiere Industries and VoxLumen legally hold several pending patents to develop the technology. However, Ramos declined to provide the patents to The Star, saying he did not want to lose a competitive advantage regarding the technology.
Green, the owner of AI Innovations, said he's never met Lindsey. Green said he is concerned about the case but thinks VoxLumen officials are legitimate businessmen with rights to the technology.
Green, like Fishers officials, has seen demonstrations of the technology and has been assured VoxLumen owns the intellectual rights and pending patents.
"It's not good news," Green said of the court case. "I'm (trusting) these guys when they tell me they've got the IP (intellectual property) locked up from a legal and contractual standpoint."
Fishers moving forward
VoxLumen plans to invest $1.275 million in building improvements and $10.77 million in new equipment, machinery, computers and information technology at its Fishers facility over the next three years, according to Fishers documents.
Once Fishers finishes what Director of Development Tom Dickey called "standard due diligence" and VoxLumen has proven it has invested at least $1 million and finishes its part in the application, the town would lend its name so VoxLumen could obtain the $10 million in bonds.
But the town is under no obligation to pay back the money even if VoxLumen defaults, Dickey said. Communities can lend their name to business-backed industrial revenue bonds to spur development, Dickey said, with no risk of losing money or damaging their credit rating.
Fishers is lending the company $800,000. The town, Dickey said, has liens against both the Diamonds Food building and VoxLumen's personal property within the building should VoxLumen fail to pay back that money.
Weingardt said there's no timeline to finish the background checks and due diligence before signing the bond deal for VoxLumen. He's confident Lindsey is not involved in the deal. And hedoes not plan to wait for the trial to end to move forward.
"To me, this verifies and underscores the process we go through to make sure the people we are working with don't have issues," Weingardt said.
Call Star reporter Chris Sikich at (317) 444-6036. Follow him on Twitter: @ChrisSikich.