Not that long ago, Robert Alexander was a Las Vegas whale.
He blew thousands in nightclubs, bet even more at craps and bragged about winning $ 7.8 million at the Golden Nugget. He boasted about his role in the success of the hit video game “Grand Theft Auto” and sat on the board of its parent company. Over the years, it’s said, he palled around with Shaquille O’Neal and boxer Keith Thurman.
But last month, Alexander was hoping a judge would not revoke his $ 100,000 bond. The tech entrepreneur is alleged to have used the coffers of Kizzang, his sweepstakes-based online-game company, as his piggy bank. The Securities and Exchange Commission has charged him with embezzling “at least $ 1.3 million” for personal use.
According to court documents, Alexander allegedly blew $ 404,000 of the funds in casinos, while $ 579,000 went to his personal credit-card bills. He also allegedly spent money that wasn’t his on twenty-something daughter Elyse: $ 25,000 on payments for her BMW and $ 28,000 on her education at the Culinary Institute of America.
This comes two decades after Alexander sold his firm to Take-Two Interactive, the parent company of “Grand Theft Auto,” for a personal windfall of $ 30 million.
According to his sister Ellie Alexander, “At 16 [Robert] started selling video games out of my parents’ [Chicago-area] basement.”
He married Donielle Tharnstrom in 1989, got big in the world of game distribution and partnered with Jack of All Games. When it was bought by Take-Two, Alexander worked on distributing “Grand Theft Auto” to Walmart and Costco.
Within a year, however, he found himself ousted.
Robert received a big payout, though, which fueled his high stakes gambling in Vegas. His life, said a relative, was a roller coaster of seven-figure swings — including a 2004 hot streak that is said to have made him millions of dollars richer. But when he and Donielle divorced in 2006, Robert allegedly claimed to be broke.
Robert frequently fell in and out of money, said sister Ellie. He drove a Maybach and was courted by casinos (although one host recalled Robert stiffing a valet after a big win). Sources describe him as generous with friends.
“We never chose the food when Robert took us for dinner,” one pal said. “He ordered for the table, sometimes getting half the menu and most of the desserts.”
But Robert also hit up fellow gamblers for loans. “He borrowed $ 200,000 from me, right at the Wynn craps table,” said Eric Fessler, a real estate investor in Miami. “That was in 2007. I have yet to see a dollar.”
Poker pro Patrik Antonius said, “I loaned him $ 700,000 . . . He never paid me back.”
By 2013, Alexander had cooked up Kizzang. “It wasn’t a bad idea . . . but Robert could never articulate how he would make money,” said Vincent Bitetti, who was the company’s chief product officer.
According to court documents, Robert lied to investors about having donated $ 50 million to a Los Angeles hospital “to impress them with his wealth,” said a former friend. He falsely claimed to have helped create “Grand Theft Auto” and to have invested millions of his own money in Kizzang.
It was enough to impress 53 people into bankrolling some $ 9 million over the course of the company’s existence. Boxer Thurman, according to an insider, chipped in more than $ 100,000. Former NBA star Charles Oakley even attended some investor meetings.
Still, Kizzang struggled. “We couldn’t get enough people to play,” said a former employee. “And we ran out of the money required to acquire customers.”
Finally, according to a former employee, one investor became concerned after asking to pull out — and was rebuffed. Soon after, the FBI began to investigate.
Alexander was arrested Feb. 7 at a hotel on Long Island. He is accused of securities fraud and wire fraud. (Calls to his lawyer, for comment, were not returned.)
Ellie said of her brother: “If Robert did take the money, he never thought he would be unable to pay it back.”
The former employee agrees. “He had the gambler’s mentality. Robert prided himself on comebacks in the casino and thought he could manage one in his business.”