Salad Bowl Restaurant Exec Is in the Soup
DALLAS (CN) - A director of The Salad Bowl restaurant chain was sentenced to 70 months in federal prison for misleading investors and stealing their money.
Michael David Carroll, 38, of Irving, also was ordered to pay $1.4 million in restitution.
Carroll pleaded guilty to wire fraud in April 2013 for his role as registered agent, director and incorporator of The Salad Bowl Franchise Corp.
Prosecutors said Carroll fraudulently induced investors in California and Texas into buying restaurant franchises from November 2008 to September 2010.
"He provided false financial data to investors including inflated daily and monthly sales figures at some franchise locations," prosecutors said in a statement after the sentencing. "He also falsely represented to some investors that investment funds would be used only to fund franchise construction expenses and to purchase franchise restaurant equipment related to that investor. Carroll, however, admitted that he commingled investor funds into his operating account and then used investor funds for his own personal use."
Prosecutors said Carroll altered financial statements to represent the inflated sales data. They said he leased some of the equipment used in the franchises, but falsely told investors the equipment would be fully owned by them as part of a turnkey operation.
Carroll admitted he forged his business partner's signature on a $23,000 loan secured by a franchise's accounts receivables. He also admitted hiding his bankruptcy filings from potential investors.
Carroll's attorney, Peter Schulte, told the Dallas Morning News on Monday evening that his client "fully cooperated" with authorities and "admitted his conduct."
Schulte asked for probation or a prison sentence of up to 50 months for his client. He told the newspaper Carroll dealt with financial problems when the business "started to go south."
U.S. District Judge David Godbey ordered Carroll to surrender to the Bureau of Prisons by May 16.