Ultracade Founder David Foley Pleads Guilty to Conspiracy to Commit Fraud and Other Charges
Home Arcade Stuff!
Really, David, really?
Many retro-gamers may recognize the name Ultracade. It was a semi-legal way to have a Multi-Arcade Machine Emulator (MAME) system. The reason I say semi is that David Foley, the guy who designed this thing, got in trouble for selling Namco game packs without permission.
Namco America, back in 2003, released a press release that sternly warned potential purchasers of Ultracade machines that Namco had not licensed any of their titles--Pac-Man and Galaga being their two best known games--to Ultracade Technologies. Namco warned operators that they were purchasing an "unlicensed, illegal product and that Namco is taking appropriate action to protect its intellectual property from misuse / theft."
Foley then further angered hobbiests by trademarking the MAME name. His stated goal was to stop commercial sales of MAME platforms online since the buyers generally had to then download illegal copies of the game ROMs to actually do anything with the systems. Since the MAME software was free-ware that had been built as a hobby over various years, it substantially angered the collector community. Just Google "David Foley" and "MAME" to get a taste of what the opinion out there was like. Be warned, it's not pretty.
Despite the questionable legality of Ultracade's product and marketing, Global VR started a deal with Ultracade founder David Foley for Global to manufacture and distribute the Ultracade system in late 2005. Foley was to become Chief Technology Officer of Global as part of the buy-out. Global quickly realized their mistake, stopped the acquisition, and fired Foley (after they learned he was still selling the game packs).
Global VR's claim, pursued by the U.S. Attorney's office, was that Foley had continued to manufacture and sell the add-on game packs for the system through a dummy. Thus began a long legal battle that ended January 9, 2012. This past Monday, Foley pled guilty to these charges and to receiving payment for them through the mail and through wire transfers.
He also pled to other charges unrelated to the game industry--He pled to conspiring to defraud Countrywide Home Loans of nearly 3 million dollars by claiming on his loan applications that he was still employed by Global VR and having an accomplice "verify" this employment after he had been fired by Global. Foley argued in the Silicon Valley Mercury News that he had been employed by Global at the time he signed the papers, but was not working there by the time he filed them; he says that he did inform Countrywide that he was no longer employed by Global. His employment was terminated a week before escrow on the properties closed.
Foley's chief argument, despite pleading to the first charge, was that "Ultracade no longer existed" since he had quit operating Ultracade Technologies and Global VR had failed to complete the acquisition of the company.
The penalties for the two charges can be harsh. The maximum penalty for conspiracy to commit mail fraud carries 20 years in federal prison and a fine of up to twice the net gain of loss from the fraud, plus restitution. The conspiracy to commit bank fraud penalties can be as much as 30 years in prison and $1 million in penalties, plus restitution. The court will determine the ultimate penalties, but Foley is facing up to 50 years in prison and over $1.25 million in fines and restitution.
The final sentencing is set for April 30, 2012. Foley is currently out on $100,000 bond.