The founder of PureChoice, a Burnsville company now out of business that once made indoor air testing equipment, has been indicted by a federal grand jury on charges of defrauding investors of more than $2.5 million.

The indictment, returned Tuesday in U.S. District Court, accuses Bryan Reichel, 59, the founder and CEO of the company, of lying to two investors about the company's prospects, inducing them to invest $3.4 million from 2007 to 2009, and then using most of the money to pay off other investors, purchase stock in other companies or pay off his personal credit card debt.

Reichel, who faces seven counts of wire fraud, is scheduled to appear on the charges Oct. 1 before Magistrate Judge Steven Rau in St. Paul.

"Mr. Reichel denies any impropriety and wrongdoing in regard to these accusations," said his attorney, Charles Hawkins of St. Paul.

PureChoice, founded in 1992, sold air quality monitors for commercial buildings. A 2010 Star Tribune article about the company said it had 15 employees and annual revenue of $800,000 with expectations for major growth.

The Better Business Bureau says PureChoice is out of business. The company's website disappeared in mid-2011, according to Internet history service Archive.org.

According to the charges, Reichel concealed from investors that its "Nose Monitors" didn't pass federal tests for electromagnetic emissions. He also sent investors a U.S. General Services Administration publication that had been altered to indicate it mentioned PureChoice by name, implying an agency endorsement, the indictment said.

Reichel also told investors that PureChoice was working to expand its relationship with 3M in 2008, a time when that company had given notice not to renew its agreements to work with PureChoice, the indictment said.

While offering such false information, Reichel encouraged two unnamed investors repeatedly to loan the company money or buy stock, the indictment said. The seven wire fraud counts relate to e-mails and wire transfers for those transactions.

The indictment said the government will seek at least $3.4 million in forfeiture from Reichel. The U.S. attorney's office said the fraud amounted to more than $2.5 million.

"Protecting the citizens of Minnesota from financial predators is one of my top priorities," U.S. Attorney Andrew Luger said in a statement.

David Shaffer • 612-673-7090 Twitter: @ShafferStrib