Las Vegas energy drink company’s former CEO convicted of tax evasion

By Jackie Valley

Monday, April 2, 2012 | 3:27 p.m.

The former CEO of a Nevada sports energy drink company faces possible prison time after his conviction Monday on tax-evasion charges, Nevada’s U.S. Attorney David Bogden announced.

Las Vegas resident Russell Pike, 50, was convicted of one count of tax evasion for 2006 for evading taxes due on more than $7.9 million of income, Department of Justice officials said. The conviction ended a one-week bench trial before U.S. District Judge James C. Mahan.

Pike in 2004 founded the energy-drink company Xyience Inc., the maker of popular drink Xenergy, sold in more than 45,000 stores nationwide, officials said.

Pike received at least 12 million shares of Xyience stock at the company’s inception and sold more than 4.4 million shares in 2006 for approximately $7.9 million, officials said. Those sales included more than 3 million shares to an investor for $5 million in November 2006, officials said.

Early the next year, Pike requested the investor change the date of the stock purchase agreement from 2006 to 2007, so he could avoid paying taxes in 2006, officials said.

Authorities said Pike enjoyed a lavish lifestyle in 2006, driving luxury cars and betting millions of dollars at Las Vegas sports books.

During that time, Pike made payments on a 2005 Lexus sport-utility vehicle and 2005 Land Rover that were held in the name of a nominee, officials said. He also used a nominee to buy a 2007 Mercedes Benz SL55 AMG for $151,614, officials said.

Manzen LLC acquired assets of Xyience Inc., in April 2008, three months after Xyience filed for Chapter 11 bankruptcy in January 2008. Pike is not involved with Manzen.

Pike has four prior felony convictions, including two in Nevada for bank fraud and money laundering, officials said.

Sentencing on the tax-evasion conviction is scheduled for July 2. Pike faces up to five years in prison and a $250,000 fine, authorities said.