Seventy-six-year-old Social Voucher CEO is in the middle of a contreversy after claims surfaced that he misappropriated $4.6 million of investor funds and used it for several purposes including his gambling and personal expenses.

Gerald Parker's Lake Park-based startup solicited money from investors for five years, from June 2013 until June 2018. The company has raised an approximate sum of $20.5 million from 400 retail investors in the U.S. via unregistered "common stock," according to the Securities and Exchange Commission complaint.

The company, Social Voucher, was a "mobile coupons solutions provider" that is a direct competitor of Groupon and Living Social. Its purpose is to allow businesses to offer coupons directly to customers using various social media channels.

A network of sales agents

To lure customers to his reported scheme, Parker employed a "network of unregistered sales agents." These agents cold-called unsuspecting customers and pitched them a business with tremendous upside potential. One investor was even guaranteed that the stock of Social Voucher is bound to go up to $6 a share.

They also touted Parker's extensive experience in marketing, branding, angel investing, and leadership.

After the company received the money, a stock certificate signed by Parker himself were sent out to investors.

Where did the money go?

The collected money was said to be used to build an application for Social Voucher. However, Parker reportedly misappropriated 22% of the $20.5 million or approximately $4.6 million: $2 million went to his expenses in Seminole casinos, another $2 million in cash withdrawals and $590,000 for personal expenses.

Parker also paid 46% of the total funds or $9.6 million in total commissions to the network of sales agents; this was a result of paying between 35% to 50% in commission for each sales agent.

All in all, 68% of the $20.5 million investor money was misappropriated, leaving less money to develop its purported application.

Social Voucher investors may still be able to recover some of their money as the SEC seeks disgorgement of ill-gotten gains. The SEC is also seeking a permanent injunction and civil penalty case against Parker.

"When the SEC brings a successful enforcement action, the court or the SEC may order a wrongdoer to disgorge (give up) the ill-gotten gains resulting from the illegal conduct. The disgorged funds may be distributed to investors who were harmed by securities law violations," according to

business meeting A startup CEO reportedly misappropriated millions of investor funds on casinos and personal expenses. Photo: rawpixel/ Pixabay