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SALT LAKE CITY — Timothy Nemeckay, a 64-year-old Park City man, was sentenced to prison Wednesday after admitting to duping investors out of around $1.7 million for the development of a brewery, court documents show.
Over 100 investors backed Nemeckay's concept — a brewery, restaurant and retail store in Summit County — though, they did not know he was "commingling funds" between personal and business accounts, according to court documents.
Nemeckay accepted a plea deal, which dropped charges of securities fraud, making false statements to the SEC and money laundering in exchange for a guilty plea to wire fraud. In his plea statement, Nemeckay said, "I obtained money by means of materially false and fraudulent representations and promises, and omissions of material facts."
In a 2014 promotional video posted by Nemeckay on Dailymotion, Nemeckay said Mine Shaft Brewery was "poised to become one of the top 50 brewers in the next five to six years. Sounds ambitious, doesn't it?"
His claims of a 20,000-square-foot facility in Kimball Junction — with a brewery, restaurant, event space and 60,000-gallon barrel capacity pumping out craft beer and hard cider — never materialized.
Investigators say he used the money to pay "personal bills and utilities, personal mortgage payments, luxury items at Louis Vuitton and Christian Louboutin, concert tickets, swingers clubs, strip clubs and vacations to Hawaii and Cancun, Mexico."
To make matters worse, Nemeckay was banned from raising securities in the state and sanctioned by the Securities and Exchange Commission. He was involved in an energy drink company startup that was at the center of a 2013 fraud case which landed its founder in prison for five years.
Nemeckay was never charged, but was required by the Utah State Securities Division in 2014 to "disgorge all profits from his sale of securities," around $300,000, and "never to act as securities agent in Utah in the future," according to court documents.
In 2016, he was barred by the SEC "from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal adviser, transfer agent, or nationally recognized statistical rating organization and from participating in any penny stock offering," the indictment says, but Nemeckay explained away the punishments by telling investors he was a "whistleblower" who helped the SEC send his business associate to jail.
Prosecutors claimed he used the money he siphoned from brewery investors — around 60% of what was raised — on himself, including paying the securities violations and the mortgage on his house in the Bear Hollow Village resort community south of Kimball Junction.
U.S. District Court Judge David Barlow ordered Nemeckay to sell the house and pay back over $300,000 from the proceeds. Nemeckay has also been ordered to pay over $1.7 million in restitution, will spend a year in federal prison and serve two years of probation.
"Far too many Utah headlines report homegrown fraud schemes. There are disproportionate numbers of wolves in sheep's clothing in our state," U.S. Attorney John W. Huber said in a statement at the time of indictment. "Once again, we encourage those considering investment opportunities to do their due diligence before handing over their life savings to someone who doesn't have their interests at heart."
