After deliberating for two days, a jury in St. Paul found former entrepreneur Bryan Reichel guilty Thursday on 11 counts of fraud, but not guilty of concealing bankruptcy estate property.
Reichel, 61, was indicted in 2014 on allegations that he lied to investors to get them to fund his start-up company, PureChoice. Last year, the grand jury added five charges alleging that after PureChoice closed its doors in 2011, Reichel tried to defraud the bankruptcy court.
Jurors saw pages and pages of e-mails and heard hours of testimony from former PureChoice employees and investors during the nearly monthlong trial. They found Reichel guilty on seven wire fraud counts and four bankruptcy fraud counts.
Throughout the trial, federal prosecutors depicted Reichel as a crooked, self-serving salesman who wanted the luxurious life of a successful CEO but didn't want to work for it.
According to prosecutors, Reichel spent years soliciting investments in PureChoice, an air filtration equipment company, by insisting that it was always on the verge of success. In reality, the Burnsville-based company was accumulating tens of millions of dollars in debt — and investments were being used to pay off previous investors, as well as to enrich Reichel and an investor named Richard Perkins.
Perkins, a well-known Minnesota investment adviser who put millions of dollars into PureChoice, was described by federal prosecutors as an unindicted co-conspirator.
Between 1992 and 2011, PureChoice investors lost a net total of about $25 million, according to government court filings.
Reichel filed for bankruptcy in April 2011. Before that, he moved his family's finances into a checking account attached to his limited liability company.
Once the bankruptcy began, he failed to disclose personal property, including a large gun collection and all of the home goods and furnishings in his 10,000-square-foot mansion. He also failed to turn over a $25,000 tax refund to the court. Reichel's criminal defense attorneys blamed his bankruptcy attorney for those lapses.