An indictment has been unsealed, charging five former principals of the aerospace start-up company Theia Group, Inc. with a scheme to defraud investors and lenders out of $250 million. Erlend Olson, John Gallagher, Stephen Buscher, Joseph Fargnoli, and Jamil Swati are accused of this multi-year fraud. Additionally, Olson faces charges for evading over $3.9 million in personal federal income taxes.
Theia Group was headquartered in Washington D.C., and its plan involved launching 112 satellites at a cost between $10 billion to $15 billion starting in 2022. The company aimed to raise funds by offering perpetual data and analytics services for an upfront fee of $2 billion from various nation-states. However, Theia only managed to secure approximately $250 million through loans and investments obtained under fraudulent pretenses.
According to the indictment, the defendants allegedly made false statements about revenue from non-existent government contracts and provided fake financial documents including a fabricated $6 billion escrow account statement. They also misrepresented Theia's technical capabilities.
Between 2018 and 2020, Olson reportedly concealed millions in compensation from the IRS by directing payments through a nominee entity called Meridian Vector Corporation (MVC). These funds were used for personal expenses such as debts, a private jet membership, home rent payments amounting to $64,500 annually, a new Land Rover, and two condominiums in Las Vegas. Olson is also accused of evading taxes owed for years 2009 through 2011 by not reporting his earnings.
Each defendant faces one count of conspiracy to commit wire and mail fraud. Olson is further charged with multiple counts of wire fraud, mail fraud, and tax evasion; Gallagher with additional counts of wire fraud and mail fraud; Buscher with extra counts of wire fraud; Fargnoli with more counts of wire fraud; Swati with one additional count of wire fraud.
If convicted on these charges, each could face up to 20 years in prison per conspiracy or fraud count along with supervised release periods, restitution obligations, monetary penalties, and forfeiture orders. Olson could receive up to five years per tax evasion charge.
The case is being investigated by the FDIC Office of Inspector General alongside IRS Criminal Investigation. Prosecution will be led by Assistant U.S. Attorneys Rebecca G. Ross and Joshua Gold from the District of Columbia as well as Senior Litigation Counsel Nanette Davis and Trial Attorney Alexis Hughes from the Tax Division.
It is important to note that an indictment merely contains allegations; all defendants are presumed innocent until proven guilty beyond reasonable doubt in court.