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Kelly Sentenced for Stealing Funds Invested in Bogus Fuel Technology VentureGenesis World Energy founder lied about the technology and its alleged
partners, defrauds investors, misallocates funds, including $2.5 million from
around 500 New Jersey residents.
According to Director Paw, Superior Court Judge Thomas P. Kelly of Mercer County sentenced Patrick Kelly, 51, of Kuna, Idaho to five years in state prison on a charge of second-degree theft by failure to make required disposition of property received. The defendant also was ordered to pay $400,000 in restitution. Kelly pleaded guilty to the charge on July 31, admitting that he used more than $200,000 in funds invested in United Fuel Cell Technologies to purchase eight cars in his own name. An investigation by the Division of Criminal Justice determined that between November 2000 and June 2004, Kelly collected about $2.5 million in investments in United Fuel Cell Technologies from about 500 people, mostly New Jersey residents. It is alleged that Kelly spent investor funds on a variety of expenses, many of which were clearly not related to the business or the development of their purported technology. Kelly allegedly spent $80,000 for a fountain for his home and financed a credit card for his 12-year-old daughter. This defendant is going to prison because he stole from investors, said Attorney General Rabner. We are committed to vigorously prosecuting these cases to protect New Jersey residents who are trying to invest and save for their retirement or their childrens education. Mr. Kelly claimed to offer investments in a breakthrough technology. In reality, he offered only lies, said Director Paw. We have ensured that he will be appropriately punished for his greed and deception. The Division of Criminal Justice obtained a state grand jury indictment on Sept. 23, 2005 charging Kelly with second-degree securities fraud in connection with his sale of common stock in United Fuel Cell Technologies. The indictment alleges that he falsely claimed that United Fuel Cell Techologies was a Delaware corporation, and that Hewlett Packard and IBM had agreed to assist the corporation in developing and marketing its technology and related products. In fact, United Fuel Cell Technologies was never incorporated, and Hewlett Packard and IBM did not make any agreement with the company. Kelly also was indicted on second-degree charges of conspiracy and theft. The judge today dismissed charges in the case against a second man, John Yoka, 35, of Livermore, Calif. Hydrogen fuel cells, which are a legitimate technology, generate energy using hydrogen or hydrogen-rich fuel, with water as a byproduct. However, Kelly, who also used the name Genesis World Energy, fraudulently claimed to have invented a process to separate the hydrogen and oxygen molecules in water to produce hydrogen and oxygen gases to be burned as fuel or used in fuel cells. He claimed the technology would free the U.S. from dependence on oil from the Middle East. State Investigator Noelle Holl and Deputy Attorney General Patrick J. Flor were assigned to the investigation for the Division of Criminal Justice. They were assisted by Investigators Dean Kuehnen and Julian Leone of the New Jersey Bureau of Securities. Flor prosecuted the case and represented the state at the sentencing. # # #
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