VR Investor Michael Brent Rothenberg Convicted on Multiple Fraud Charges

An ex-San Franciso venture capitalist was convicted by a federal jury on Thursday of many charges for defrauding investors over $18 million in investments, as per federal prosecutors. Michael Brent Rothenberg who is 39 years old was found guilty of wire fraud, bank fraud, money laundering, and making false statements to a bank, as per the U.S. Attorney's Office for the Northern District of California. 

The Conviction of Michael Brent Rothenberg

The conviction was followed by a seven-week trial where prosecutors said that Rothenberg had lied to investors in his venture capital fund, using their money to prop up the virtual company that he seemingly owned. According to the prosecutors, a “large amount of venture capital fund money” was used to fuel the company in its infancy, as per Mercury News.

Rothenberg later lied to Silicon Valley Bank about his finances to get a $4 million line of credit. His sentencing is scheduled for March 1, 2024, and is currently out of custody on pre-trial bail. Rothenberg currently faces a maximum of 60 years in prison and about $1.5 million in compensation. 

He is infamous for his business schemes and is a self-described "millennial venture capitalist." He is also known as "Silicon Valley's Party Animal" for throwing fraternity-like parties for employees and business associates, fueled by alcohol and money. It's also said that he is partially the inspiration behind the famous HBO comedy "Silicon Valley" that ran from 2014 to 2019. 

This conviction comes after two different high-profile fraud convictions of Silicon Valley executives. The first one is the very famous case surrounding the medical company Theranos whose founder Elizabeth Holmes is currently serving a 9.5-year sentence in a Texas prison after she defrauded investors, and the second one is the case surrounding the company FTX whose CEO San Bankman-Fried was convicted in the largest cryptocurrency fraud trial in history.

Rothenberg's Venture Firm

Rothenberg's firm Rothenberg Ventures Management Company began to collapse in early 2016 and rumors had it that the firm was misusing the funds and internal disarray. The company later settled charges with the U.S. Securities and Exchange Commission. The firm is set to be tried again on these charges at a date that is yet to determined. 

The Rise and Fall of Michael Brent Rothenberg

Rothenberg came from humble beginnings and had no family or money. He once said that he was smart enough to nab undergraduate and graduate programs at the university but then started a real estate fund with his brother before moving on to Harvard to secure an MBA.

Rothenberg was a natural salesperson and quickly began gaining traction, He launched the startup accelerator, River, which planned to provide $100,000 in seed funding to virtual reality companies. With this, he achieved fame and received positive press coverage. He began attending parties and became famous for his annual ASHes at Oracle Park. 

Rothenberg soon came under speculation when Bloomberg questioned his money spending and said that the firm's expenses were not exactly clear. In an attempt to fix his mistakes, he even approached the Silicon Valley bank and made various "false statements" and misrepresentations all to get a $4 million line of credit, according to reports. 

It was later revealed that the charges included money laundering, bank fraud, and making false statements to a bank along with wire fraud. As of 2023, according to the Oakland jury, Rothenberg is guilty of it all.