A Maine native was arrested on Tuesday for allegedly defrauding investors who provided funding to his artificial intelligence development company.
Michael Brackett, 36, is accused of convincing an investor to give his company, Centricity, Inc., $500,000 based on documents he falsified to misrepresent the financial health of the company, according to an indictment filed in the U.S. District Court in Manhattan, Aug. 2, and unsealed Tuesday.
He is charged with one count of securities fraud and one count of wire fraud, each of which carry a maximum sentence of 20 years in prison.
Brackett founded Centricity in 2019. The indictment states that the fraud occurred in the first half of 2021 before the company “abruptly ran out of funds and ceased operations” in June 2021.
In January of that year, when Centricity’s account balance was $94,420, the grand jury’s findings allege Brackett added a “5” at the beginning of the balance to make it falsely appear as $594,420.
The indictment states, additionally, that Brackett provided a list of 13 customers to the investor, of which only two had ever given money to Centricity and in much smaller amounts than stated. Unaware of this, the investor wired Brackett $500,000. Brackett resigned when the company folded, and the investor was unable to get a refund.
Brackett grew up working at his family’s grocery store, Brackett’s Market IGA, in Bath then moved to Hannaford Supermarkets, where he managed the regional chain’s dairy portofolio, according to a 2020 report in the Times Record.
The article, based on a press release marking the formation of Centricity, says Brackett founded the AI start-up with Jason Nichols, the former head of artificial intelligence at WalMart.
The company took aim at Amazon and online retailers that, they said, “cut the physical retailer out of the transaction.”
Centricity planned to monitor “almost a billion points of internet traffic daily,” using AI to predict product trends in retailers’ markets to help them “make proactive decisions that are aligned with customers’ desires — now, and in the future.”