Judge Denies Bail To SF Startup Founder Accused Of Bilking Investor

A San Francisco startup founder who is accused of defrauding an investor of $210,000 was denied bail for the time being by a federal magistrate in the city today.

U.S. Magistrate Elizabeth Laporte said that a defense proposal to have Jonathan Mills, 30, of San Francisco, and his mother in Ohio sign financial bonds didn’t include an adequate guarantee that the bonds would be backed up by any financial resources.

“I’m concerned that’s the element that missing. It’s not an adequate deterrent” to fleeing,” Laporte said.

Mills, who is also known as Jon Mills, is the founder and former CEO of Motionloft, a technology company that uses sensors to gather data on vehicle and pedestrian movements.

He faces one count of wire fraud for allegedly bilking a doctor of $210,000 in November by falsely telling him that Motionloft was soon to be acquired by Cisco Systems Inc. and that the investment would bring huge returns.

Mills has been in custody since the FBI arrested him a week ago. While he awaits trial, prosecutors are seeking to keep him in jail on the grounds that he is a flight risk and an economic danger to the public.

Although a criminal complaint pending against him contains only one charge, Assistant U.S. Attorney Douglas Sprague alleged during the detention hearing today that Mills defrauded several other investors of hundreds of thousands of dollars.

Sprague said, “Mr. Mills is a horrendous candidate for release, in the government’s view. Mr. Mills has lied to everyone he has come in contact with in the last several years.”

The prosecutor alleged that Mills took a total of $600,000 from several victims for supposed investments in 2013 alone, fleeced an unspecified number of victims in earlier years and used the company “as a personal piggybank” for a lavish lifestyle.

Authorities have previously said they believe there were additional victims and have urged anyone with information to contact the FBI.

Laporte said she believes a bond signed by Mills’ mother would not be an adequate bail guarantee because the mother, who lives on Social Security in a rural corner of Ohio, doesn’t appear to have financial resources.

But after Assistant Federal Public Defender Jodi Linker said Mills might be able to offer other forms of a financial guarantee, Laporte agreed to reconsider bail at another hearing on Thursday.

“If there were a viable surety, I would release him with a lot of stringent conditions,” including electronic monitoring, the judge said.

At Sprague’s request, Laporte set a hearing on March 7 for either a preliminary hearing on the complaint or an arraignment on a possible grand jury indictment.

If an indictment, which could contain additional charges, is issued, it would replace the criminal complaint, which was filed under seal on Feb. 7 and was unsealed after Mills’ arrest.

Mills founded Motionloft in 2010 and served as CEO until he was fired by a vote of the company’s shareholders on Dec. 1, 2013, according to an FBI affidavit filed with the complaint.

Julia Cheever, Bay City News

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