A man who promised to build a large data center in Floyd County, Virginia is due to be sentenced in Ohio for swindling more than a million dollars through fraudulent bank loans.

Self-styled data center entrepreneur Paul Allen has pleaded guilty to one count of conspiracy and three counts of bank fraud, reports The Roanoke Times. Despite a lengthy legal process, it seems that Allen’s company – Data Knight 365 – was arousing suspicions amongst Floyd County residents well before it imploded. 

Idiocracy

Allen (no relation at all to Microsoft co-founder Paul Allen) and his company B-Telecom arrived in Floyd County back in 2009, promising a £25 million server farm in the Floyd Regional Commerce Center that would create 20 local jobs.

Allen got a land purchase agreement with Floyd County, and contracted Data Knight 365 to build it.

Data Knight 365 – aka Power Direct Marketing - was a small company registered to Bill Byler, who also ran an Amish furniture business. It was likely created as a shell for exactly these types of ‘projects’.

In the following months, while Allen was gathering support and trying to attract investors, local residents David St Lawrence and Doug Thompson pointed out that Data Knight 365’s ‘world headquarters’ consisted of a modest shared office with no signage.

“After using Google and Google maps for an hour, I really wonder if our trusting local people are being taken for a ride,” wrote St Lawrence in August 2009.

“I fear that they will attempt to raise money and get tax and rent concessions and we will have nothing to show for it in six months,” he added. “The lack of a credible track record and a real business address has me wondering why we are dealing with these people.”

And sure as eggs is eggs, the company defaulted on its obligations in December 2009. It turned out that B-Telecom’s data center in Ohio didn’t actually exist, and even the photos on its website were stolen from AT&T.

Allen and the president of an unnamed Tenessee bank were accused of defrauding investors of at least $1.2 million between 2003 and 2008, but only Allen was charged – his partner was already in prison having been convicted in a different case.

Allen pleaded guilty in the Northern Ohio federal court, and will be sentenced on June 29. The deal that never was had cost Floyd County thousands of dollars – which, according to Thompson, it is unlikely to ever recover.