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FORT MYERS — Three people connected with VR Laboratories have been charged with defrauding Lee County of about $4.7 million in grant funds.
The office of acting U.S Attorney W. Stephen Muldrow, based in Tampa, announced the indictment Monday in a press release.
Kay Gow, Robert Gow and John Williams Jr. were charged with conspiracy to commit wire fraud and money laundering, wire fraud and illegal monetary transactions, according to the statement from Muldrow's office. If the Gows are convicted on all counts, they face a maximum penalty of 45 years in federal prison. Williams could face a maximum penalty of 25 years in federal prison.
The Gows formed VR Laboratories, a Fort Myers-based botanical extract and herbal drink company, in 2010. The indictment states Williams and his family members were “investors in and on the payroll of entities owned and controlled by the Gows.”
VR Labs received grant money from Lee County's Financial Incentives for Recruiting Strategic Targets (FIRST) in 2011 and 2012. That program consists of taxpayer funds set aside by the county to bring economic development projects to the Fort Myers area.
But in seeking the award, the Gows allegedly made “numerous false and fraudulent representations to various individuals and government entities about their financial success,” the release states. One of those alleged false statements: that VR Labs was poised to become a leading global formulator and manufacturer of botanical pharmaceuticals.
Lee County awarded VR Labs $5 million in FIRST incentive program funds to build a manufacturing facility. Authorities contend the Gows claimed the facility would bring hundreds of high-paying jobs and economic growth to Lee County.
Once VR Labs executed an agreement with Lee County, Williams, a long-time friend of the Gows, registered a fictitious name, “Williams Specialty Bottling Equipment,” with the Florida Secretary of State, prosecutors allege.
“The Gows then represented that Williams would provide the bottling line for the manufacturing facility when he had no such experience or expertise,” the U.S. Attorney's office states in the release. “Williams used false and fraudulent invoices for work and services allegedly performed on the bottling line to make demands for payment and, once paid, kicked back a substantial portion of the funds to VR Labs and the Gows. The Gows then used Williams's false and fraudulent invoices to justify requests to Lee County for the payment of the grant money.”
The Gows, officials add, also tried to conceal the source of the kickbacks through the creation of fictitious entities and documents.
Lee County ultimately disbursed about $4.7 million in FIRST incentive grant funds to VR Labs. But the manufacturing facility was never completed or operational.
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