California Businessman Accused of Defrauding I-Gaming Investors

15 June 2001
A Northern California grand jury indicted Robert Robb, through his alleged association with two online gambling sites, on May 29 on 10 counts of wire fraud and one count of extortion.

According to the indictment, filed in the U.S. District Court, Northern District of California, San Jose Division, Robb engaged in a complicated scheme to swindle more than $4 million from numerous Silicon Valley investors for his "skill-based gambling games that could be played by multiple players either on machines in casinos or on the Internet." As part of his alleged scheme, Robb told investors that their money was being used to manufacture, develop and market the games of two companies for which he allegedly founded and operates: Millennium Networks, Inc. and

Robb is accused of using several falsehoods in persuading investors to give him money. Among other things, Robb allegedly indicated that prototypes of the machine had been installed in several Las Vegas casinos, including the Bellagio Hotel and Casino, MGM and Mirage Resorts, and that the Nevada Gaming Commission was "very close" to approving the games. He's also said to have dropped the names of some purported top-notch investors, including Microsoft President Steven Ballmer, who supposedly had offered $50 million for the games' patents, and David Kotkin, better known as the magician "David Copperfield," who had supposedly helped in a successful rollout of the games. None of the above statements are believed to be true.

As the investors became less willing to part with their money, Robb allegedly began pressing even harder and threatened to kill six of them (all Microsoft employees, who together had given Robb about $2.6 million).

More money was obtained from Edward Zanelli and his family, who eventually invested approximately $1.43 million with Robb. At one point, Zanelli was promised that part of Zanelli's funds would be repaid through the purchase of 90,000 shares in Eyevelocity, a California corporation doing business in Oregon. Zanelli never received the Eyevelocity shares or a refund of his money.

Additionally, Robb is said to have sent fake documents to persuade Zanelli to further bankroll his scheme. Among the documents was one that bore the forged signature of magician David Kotkin, who had allegedly made $4 million during the rollout of the games. Robb is also accused of forwarding an email that supposedly included a bogus offer from Microsoft's Ballmer to purchase Robb's gaming patent for $50 million.

According to the indictment, another $70,000 was bilked from Brian Kandel and others, who were told during a meeting that would eventually see a profit of $9.7 million once winnings were paid out to participants of the game machines' rollout. As the scheme began unraveling and the investors became unwilling to send more money, Robb allegedly told Kandel that was involved with a Japanese company, Aruze, that had ties to organized crime and that Kandel needed to send money to pay an installment on a loan from that company. Robb is accused of sending Kandel a threatening email that reads:

...[a] very good way to get killed would be for you to disclose any of the information [about Aruze's criminal ties] above, or the information in the contract, to anyone for any reason. Should this loan not go through today, I will have no choice but to leak the information and give your name and address to the folks at Aruze as the person who did it.

If Robb is found guilty of these charges, he could face up to five years in prison and fines of up to $250,000.