Founders Of Starship Snacks Charged With Wire And Securities Fraud

Acting U.S. Attorney William F. Sweeney Jr. announced Wednesday the founders of Starship Snacks, a snack business, was charged with wire fraud and securities fraud.

Seventy-two-year-old Joel Margulies of Murfreesboro, Tennessee, 65-year-old Lisa Bershan and 71-year-old Barry Schwartz conspired to defraud investors in a company called Starship Snacks and The Awake Company, according to court documents.

PrisonMargulies, Schwartz and Bershan created Starship to market and sell a caffeinated chocolate snack. The three defendants raised more than $2 million for multiple investors by promising them no losses and telling them that Monster Beverage Corp. was going to acquire the company. They also told the investors that the company’s signature product had been developed successfully. Starship could not honor those guarantees, Monster had not interest in an acquisition and it never developed a caffeinated snack.

The defendants utilized the investor monies to maintain extravagant lifestyles, purchasing luxury attire, interior decorating, plastic surgery and luxury housing in New York City, according to court records.

Bershan took pictures of herself inside her mansion to provide investors prove that she was well off. She had never owned a mansion. Margulies and Bershan signed investment documents providing that “[t]he Company and Lisa Bershan, its founder, have committed to repurchase” investors shares at the same price they paid for them, if they had not appreciated within a year.

The defendants are facing a maximum 25-year prison sentence and $5 million fine.

“As alleged, while promising a sure thing, in the form of guaranteed returns, the defendants were actually selling nothing but lies,” Kim said in a statement.  Instead of using investors’ money to grow the business, they allegedly spent it on plastic surgeries, jewelry, and cars.  Thanks to the terrific investigative work of the FBI, the defendants will now have to answer in court for their lies.”

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