S4|E11: The Silicon Valley of The South

Summary

Gone South: S4|E11 - The Silicon Valley of The South

Release Date: December 18, 2024
Host: Jed Lipinski
Publisher: Audacy Podcasts

Introduction

In Season 4, Episode 11 of Gone South, host Jed Lipinski delves into the tantalizing rise and dramatic fall of a startup incubator in Opelika, Alabama, aptly dubbed "The Silicon Valley of The South." This episode uncovers the intricate web of ambition, deceit, and redemption entwined within the community-driven Roundhouse incubator, highlighting the profound impact of one individual's fraudulent actions on a small town's economic aspirations.

Setting the Stage: Opelika's Transformation

Timestamp: [01:26]

Emily Boss, an entrepreneurship graduate from Ball State University, relocates to Opelika, Alabama, in 2012 alongside her husband. Opelika, a modest town with a population of 30,000, had recently invested heavily in a citywide fiber optic Internet network, branding itself as Alabama's first gig city with a 1 gigabit per second connection. However, the exorbitant cost of $500 per month for the service resulted in minimal adoption, leaving Opelika's economic revitalization efforts stagnant.

Emily Boss: "I was a little concerned about moving here and I was really searching for connection in my community."
([00:57])

The Birth of the Roundhouse

Timestamp: [02:14]

Emily's quest for community integration leads her to discover the Roundhouse, a startup incubator founded by Kyle Sandler, a former tech executive. Sandler's vision was to transform Opelika into a vibrant hub for entrepreneurs by leveraging the town's high-speed Internet.

Jed Lipinski: "The space she found was called the Roundhouse... founded by a former tech executive named Kyle Sandler."
([02:14])

Emily's immediate recruitment by Sandler sets the stage for what promises to be a revolutionary endeavor for Opelika.

Kyle Sandler: The Charismatic Visionary with Hidden Agendas

Timestamp: [06:49]

Kyle Sandler emerges as the driving force behind the Roundhouse. With an enigmatic background, Sandler portrays himself as a Silicon Valley savant, claiming to have been an early Google employee and a serial entrepreneur with successful exits.

Emily Boss: "He was able to use these big words that Silicon Valley kind of startup tech people would use... not the type of language that you would hear in Alabama."
([06:20])

However, Sandler's claims are later revealed to be fabrications, casting a shadow over his credibility.

The Arrival of John McAfee: A Double-Edged Sword

Timestamp: [13:55]

In a bid to elevate the Roundhouse's prestige, Sandler partners with the notorious software mogul John McAfee, who was embroiled in legal troubles in Belize at the time. McAfee's involvement brings significant media attention but also unwanted controversy.

Emily Boss: "John McAfee had an extremely powerful, commanding voice... but also, you were just kind of like, couldn't stop watching it or listening to it."
([15:05])

While McAfee's presence initially adds gravitas and attracts investors, a poorly timed photograph of him brandishing firearms outside the Roundhouse undermines Opelika's professional image.

Kyle Sandler: "I don't remember if I had told him that I went to Google or worked at Google or if other people had told him..."
([05:16])

The RecMed Startup: Hype Without Substance

Timestamp: [18:29]

RecMed, a startup incubated within the Roundhouse, becomes the poster child for Sandler's ambitious plans. Founded by 13-year-old Taylor Rosenthal, RecMed innovates first aid vending machines tailored for sporting and amusement events. Sandler capitalizes on Taylor's youthful ingenuity, orchestrating media coverage that falsely inflates RecMed's market potential.

Kyle Sandler: "We ended up doing all of the media while we're in New York."
([19:35])

Despite initial interest from major retailers like Johnson & Johnson and Walgreens, RecMed fails to secure the promised deals, revealing the lack of substance behind Sandler's claims.

The Collapse: Unmasking the Fraud

Timestamp: [25:14]

As RecMed stagnates and investor concerns mount, Sandler's elaborate facade begins to crumble. Emily Boss confronts Sandler about the dwindling funds and inconsistent narratives. A pivotal shareholders meeting exposes Sandler's deceit when he presents a fake Fidelity report to reassure investors.

Emily Boss: "That is fake. That isn't real. That isn't real, Kyle. You're not real."
([27:04])

Investigations reveal Sandler's fabricated history and misuse of investor funds, confirming his fraudulent activities.

Jed Lipinski: "He'd been convicted for attempted theft and forgery in 2010... there was no evidence he'd ever worked for Google."
([30:16])

Arrest and Consequences

Timestamp: [31:11]

After an extended investigation, Kyle Sandler is apprehended in Texas and subsequently pled guilty to wire fraud and securities fraud. He is sentenced to five years in federal prison and ordered to repay $1.9 million to defrauded investors.

Kyle Sandler: "So when I was sitting in the county jail... I wrote her a letter apologizing to her for lying to her so much..."
([33:25])

Redemption and Rebuilding: Colab Opelika

Timestamp: [34:35]

Despite the trauma inflicted by Sandler's betrayal, Emily Boss spearheads the rehabilitation of the Roundhouse into Colab Opelika. With renewed transparency and community trust, Colab Opelika flourishes, expanding its reach and supporting nearly 200 members across multiple locations.

Emily Boss: "What it is now is just like the most beautiful, most proud thing I can be of... I did."
([35:20])

Colab Opelika stands as a testament to resilience, transforming past failures into a thriving ecosystem for local entrepreneurs.

Conclusion

Episode 11 of Gone South intricately weaves the narrative of ambition turned deceit and eventual redemption in the heart of Opelika, Alabama. Through the lens of Emily Boss's experiences, listeners witness the fragile intersection of hope, trust, and betrayal within a community striving for economic revitalization. The episode underscores the importance of due diligence, community integrity, and the enduring spirit of entrepreneurship.

Notable Quotes

• Emily Boss: "He used me to do that. And that's what I felt like he robbed from me was I became very closed off from the world."
  ([34:21])

• Kyle Sandler: "I was, you know, acting as if I was truly this big tech savant that had just transplanted myself into Opelika."
  ([11:00])

• Jed Lipinski: "If you have information, story tips, or feedback you'd like to share with the Gone South team, please email [e-mail]."
  ([35:56])

Final Thoughts

Gone South effectively captures the essence of Southern entrepreneurship's challenges and vulnerabilities through the Opelika Roundhouse saga. It serves as a cautionary tale about the allure of rapid growth and the critical need for transparency and integrity in fostering sustainable community development.

Transcript

[Ana Garcia]

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[Emily Boss]

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[Jed Lipinski]

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[Ana Garcia]

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[Emily Boss]

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[Jed Lipinski]

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[Ana Garcia]

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[Kyle Sandler]

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[Ana Garcia]

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[Emily Boss]

[e-mail] so I moved here to Alabama with my husband. We moved from Indiana. In Indiana, I went to school for entrepreneurship from Ball State University and had a big desire for the startup world. Entrepreneurship, anything where people were starting a company, making a product. I was very fascinated by all of that.

[Jed Lipinski]

This is Emily Boss. In 2012, she moved to Opelika, Alabama, a quaint former railroad hub of 30,000 people near the Georgia border. Her husband had taken a job for an auto engineering firm in town. But Emily wasn't sure how to put her entrepreneurship degree to work in a small town known mostly for its antique shops and Victorian era architecture.

[Emily Boss]

I was a little concerned about moving here and I was really searching for connection in my community. And when I heard about this opportunity, that there was an incubator space in my town, I was like, what? That's amazing. I didn't expect that to be in Opelika. I was like, immediately like, I gotta go find out about this.

[Jed Lipinski]

The space she found was called the Roundhouse. Its website described it as a startup incubator, a place where entrepreneurs could come to grow their businesses. According to its website, its founder was a former tech executive named Kyle Sandler.

[Emily Boss]

I Facebook messaged Kyle and he immediately responds within seconds and said, come in, come in. We have our new location. We just got in here. You know, come meet me right now. And I thought, wow, okay, let me go see what this is about. I blindly walk in here and it's a big, huge open space, very undeveloped, but giant, lots of offices. And Kyle brings me into his office and I start telling him about myself and he hears Ball State University entrepreneurship program and his like, eyes light up and he's like, that's fascinating. Like, you would be perfect for this position. Let's hire you right now. It was so quick and so fast that I felt like I had this opportunity to be a part of something and it was just like a dream, almost too good to be true, you know, like, there was a catch to it.

[Jed Lipinski]

I'm Jed Lipinski. This is gone South. Before Emily Bass arrived in Opelika, the city was struggling to redefine itself to lure industry and startups and to prevent young people from moving away, Opelika had invested millions in a citywide fiber optic Internet network. Upon its completion, Opelika had rebranded itself as Alabama's first gig city for its new 1 gigabit per second Internet connection. But the one gig didn't immediately attract talent. The network was also crazily expensive. $500 per month, more than twice the former rate. Only a handful of families signed up. It seemed like a failed experiment until Kyle Sandler appeared. Kyle was the entrepreneur in residence at nearby Auburn University. In a meeting with the mayor, Kyle proposed creating a startup incubator to exploit Opelika's new lightning fast Internet.

[Kyle Sandler]

So the mayor, Gary Fuller and I, we hit it off.

[Jed Lipinski]

This is Kyle Sandler, and I was.

[Kyle Sandler]

Talking to him about what was going on in other cities, especially like Chattanooga and Kansas, where they were capitalizing on the Internet and Opelika was not. And you know, it was a great thing, but it was going nowhere and how could he use it for economic development?

[Jed Lipinski]

Kyle can't remember exactly what was said in that initial meeting with the mayor. He might have mentioned the Droid Guy, a popular tech blog he founded that reviewed Android devices. He may have talked about niblets.com, a small digital media company he launched to cover startups outside major tech hubs like Silicon Valley in New York. But at some point, the subject of his employment at Google came up.

[Kyle Sandler]

I don't remember if I had told him that I went to Google or worked at Google or if other people had told him, but at that time it had come into conversation, and I never denied it.

[Jed Lipinski]

Kyle had never actually worked at Google, but he'd been to Google's headquarters many times as a tech blogger. His Facebook page was littered with photos of the place. When the mayor and others assumed that he worked there, Kyle didn't bother correcting them. He also allowed them to think that he'd cashed out with an eight figure payday and sold some other Lucrative startups. Before settling in Auburn, Kyle seemed qualified and genuinely passionate about local entrepreneurship. The mayor was impressed. He helped Kyle find some empty office space near the town square and offered him free Internet, plus some generous tax benefits. They named the place the Roundhouse and painted the words Alabama's fastest startup space above the entrance. Kyle's first hire was Emily Boss. So what were your first impressions of Kyle when you met him at the roundhouse?

[Emily Boss]

When I first met Kyle, I thought he was a very kind of nerdy, geeky kind of guy. He was short, and he had kind of an unkemptness of him, but he had this ability to use his words. He was able to use these big words that Silicon Valley kind of startup tech people would use, not the type of language that you would hear in Alabama.

[Jed Lipinski]

Kyle told Emily the same thing. He told the mayor that he'd been an early employee at Google and launched a few Silicon Valley startups that had huge exits.

[Emily Boss]

He now wanted to move to a city where he could create something that he couldn't do in Silicon Valley. He needed a smaller town to recruit talent and find, you know, the next startup that could make millions. But he wanted to share it with the community by building a portfolio of investors who would all contribute. And one day, we'd have one payout from at least one company that would make it big.

[Jed Lipinski]

To make their community's dream a reality, they needed two local entrepreneurs with big ideas and local investors to support them. Kyle and Emily immediately began scheduling pitch meetings.

[Emily Boss]

His doors were wide open. If anyone wanted a meeting, they were allowed in. We would listen to four or five pitches a day, and we would sit in there, you know, like a game show, and listen to these. Sometimes good, sometimes interesting, sometimes, you know, we would Google it and be like, this product already exists. It's on Amazon right now. But then there were some great ideas, too. I mean, we had so many different companies that would come in and promote their idea and look for help.

[Jed Lipinski]

In between pitch meetings, Kyle sought out investors. His first stop was Opelika's Rotary Club, where local businessmen got together about once a week.

[Kyle Sandler]

So they were excited that we were doing something with this incredibly expensive Internet. And, you know, we ended up staying over an hour and a half talking to all these different people. I didn't pitch the investors like, hey, hey, hey, I need some money, I need some money. I created so much excitement. They would come up to me and be like, how can I get in?

[Jed Lipinski]

The way they got in was simple. An investment of $10,000 earned you one point of equity in the roundhouse. If a company went public or cashed out, that equity would get dispersed among the point holders who would make a healthy return.

[Kyle Sandler]

So a lot of these guys from the Rotary club kind of understood this concept because many of them were business owners. So it was relatively easy to get that buy in at $10,000. And then it becomes, that's all I can get? Well, no, I mean, if you want five, you can give me 50. You want 10? How much can I get for $100,000? 10 points of equity. All right, let's do that. So people were wanting to become part of our investment group in the roundhouse for anywhere from 10,000 to $100,000.

[Jed Lipinski]

Pretty soon, the formerly abandoned building was a hive of entrepreneurial activity, like something right out of Silicon Valley.

[Emily Boss]

Kyle made the place fun. I mean, we had a whole room of arcade machines. There was hoverboards everywhere, a giant snack bar that was free for anyone to take. Energy drinks, snacks, all that was included. The place was buzzing with people and kind of just a youthful vibe to it.

[Jed Lipinski]

The local media fawned over Kyle. An innovation centered podcast, Ignite Alabama, featured him as its first guest. Kyle, in turn played the role of Hotshot Tech CEO in small town Alabama. He carried three iPhones at all times. He dined out constantly and seemed to drive a different luxury car every month.

[Kyle Sandler]

The very first thing that I bought with roundhouse money that may have been an iffy thing was a Hummer. We got a H2 Hummer, but I got it wrapped around house, so it was like a promotional thing. And, you know, that was my daily driver for a little bit of time. And then I wanted to make that the work vehicle and needed another daily driver. So obviously I bought another car and then another car.

[Emily Boss]

One day he'd be driving a Porsche, and the next day he's like going to get a Tesla, and then the next week he's driving a Maserati.

[Kyle Sandler]

I was, you know, acting as if acting as if I was truly this big tech savant that had just transplanted myself into opelika.

[Jed Lipinski]

In Kyle's mind, acting as if he were a millionaire tech CEO might eventually turn him into one. And at the very least, it would draw attention to the roundhouse. Then in the summer of 2015, Kyle saw an opportunity to align himself with an actual millionaire tech CEO, albeit one who had recently been accused of murder.

[Ana Garcia]

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[Jed Lipinski]

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[Ana Garcia]

I'm Jenna Fisher and I'm Angela Kinsey. We are best friends and together we have the podcast Office Ladies where we rewatched every single episode of the Office with insane behind the scenes stories, hilarious guests and lots of laughs. Guess who's sitting next to me?

[Emily Boss]

Steve.

[Ana Garcia]

In the studio. Every Wednesday we'll be sharing even more exclusive stories from the Office and our friendship with brand new guests and we'll be digging into our mailbag to answer your questions and comments. So join us for brand new Office Ladies 6.0 episodes every Wednesday. Plus on Mondays we are taking a second drink. You can revisit all the Office Ladies rewatch episodes every Monday with new bonus tips tidbits before every episode. Well, we can't wait to see you there. Follow and listen to Office Ladies on the free Odysee app and wherever you get your podcasts. Where'd you get those shoes? Easy. They're from dsw. Because DSW has the exact right shoes for whatever you're into right now. You know, like the sneakers that make office hours feel like happy hour, the boot that turn grocery aisles into runways, and all the styles that show off the many sides of you from daydreamer to multitasker, and everything in between. Because you do it all in really great shoes. Find a shoe for every you at your DSW store or dsw.com we begin with breaking news in the increasingly strange case of American Software multimillionaire John McAfee, wanted for questioning in the Central American country of Belize for his neighbor's mysterious murder.

[Jed Lipinski]

If the name John McAfee doesn't ring a bell, you'd probably recognize the McAfee antivirus software logo on your computer screen. McAfee was an eccentric entrepreneur and computer programmer best known for his cybersecurity program. He died in 2021, but in 2012, as Opelika was laying the last miles of fiber optic cable, he was busy fleeing Belize, where authorities had accused him of killing his next door neighbor. It is the latest in the bizarre.

[Emily Boss]

Tale of John McAfee, the software tycoon.

[Kyle Sandler]

Who'S been on the lam for three.

[Jed Lipinski]

Weeks in a cat and mouse game.

[Kyle Sandler]

With authorities in belize. But tonight, McAfee was arrested by immigration authorities in Guatemala's capital.

[Jed Lipinski]

McAfee was ultimately deported to the US and cleared of any charges. He was living in seclusion in Tennessee and trying to launch a smartphone security company when Kyle reached out. Kyle knew that John was trying to rehabilitate his career. After years of controversy and legal issues, he offered McAfee office space at the Roundhouse in exchange for mentoring some of his entrepreneurs. McAfee took him up on it. Emily remembers being in awe of McAfee's presence.

[Emily Boss]

John McAfee had an extremely powerful, commanding voice. When he spoke, everyone in the room listened. He was also very paranoid. His big thing was, you need to be covering up your cameras on your laptop, like a sticker over where the camera is, because people can turn that on without you knowing. You know, never bring your phone into the shower with you. Like, very paranoid type of commentary. But also, you were just kind of like, couldn't stop watching it or listening to it.

[Jed Lipinski]

Initially, McAfee brought an air of gravitas to the scrappy startup space. He invested $125,000 in the Roundhouse, and he got it some serious media exposure. Not long after his arrival, A reporter from USA Today heard that McAfee was working out of a tiny startup incubator in Alabama. When Kyle learned the story was running on the front page, he was ecstatic. Then he saw the photo they planned to run.

[Kyle Sandler]

Now, the photo that they took for this front page story has John in front of my roundhouse, in front of my building, where the marquee says, welcome Opalika Middle School. And he has two guns across his chest, guns out.

[Jed Lipinski]

In the picture, John McAfee holding a pair of AR15s outside the roundhouse wasn't the sort of PR they were hoping for. Emily says McAfee's presence caused the town's opinion of the Roundhouse to shift.

[Emily Boss]

There's people that did not like John McAfee and immediately thought of us poorly because of that element.

[Jed Lipinski]

As the space's community manager, Emily found herself fielding questions from people concerned about the image Kyle was creating. Emily always defended him, partly because she'd seen his generosity up close.

[Emily Boss]

There was a little boy named Wendell who passed away, and we got 99 red balloons and we let them off for him. There was another little boy who had cancer, and he took him to Toys R Us and let him go on a shopping spree.

[Jed Lipinski]

Kyle seemed to love the people of Opelika. At the same time, his need to publicize every little act of generosity made Emily question his sincerity.

[Emily Boss]

So we would give the shopping spree to this little boy, but he invited news cameras there to film it and to really, truly have self promotion in his giving. And that kind of struck me. Maybe one of the first things I was like, huh, that's weird. You know, like, are we like doing this because we're doing this, or are we doing this because we're getting publicity out of it?

[Jed Lipinski]

Still, local suspicions of Kyle were outweighed by his contributions to Opelika. After years of brain drain, ambitious young people were moving back to town. The energy was palpable. In appreciation for Kyle's efforts, the mayor of Opelika held a public ceremony declaring November 24, 2015, Kyle's 40th birthday as Kyle Sandler Day in Opelika. Meanwhile, one of the Roundhouse's startups was starting to take off. It was called RecMed. Its inventor was a red headed 13 year old named Taylor Rosenthal, who Kyle had discovered through a young entrepreneurship program at Opelika Middle School. Here's how Kyle describes the idea.

[Kyle Sandler]

He originally had an idea to set up pop up tents at sporting events to sell band aids and first aid materials for spectators to these events, because injuries happen when you're at tournaments and things. And we evolved that idea through him coming at the Roundhouse to let's find a way to do it as a vending machine so that we can put it in amusement parks and baseball parks and things of that nature.

[Jed Lipinski]

At its core, RecMed was a vending machine for first aid kits. There were similar products out there. But in 2016, Kyle managed to secure recmed a spot at the Consumer Electronics show in Las Vegas, where Taylor pitched the idea to Mark Cuban. Taylor later became the youngest person ever accepted into TechCrunch disruption, a major annual tech conference in New York City. When he got the news, Kyle wrote up a glowing press release. He claimed Taylor had already turned down a $30 million offer from an unnamed consumer products company in the home and healthcare space. Taylor and Roundhouse investors took his word for it. So did a bunch of major TV networks.

[Kyle Sandler]

And by 8:00 that night, Fox Business has called. Fox and Friends has called. CNBC has called. So, you know, we end up doing all of the media while we're in New York.

[Jed Lipinski]

Here's Taylor talking to journalist Stuart Varney on Fox Business.

[Kyle Sandler]

I said earlier that you were a.

[Ana Garcia]

Very smart young man. What are you doing turning down $30 million at the age of 14.

[Jed Lipinski]

It took a while to think about it, but we had felt like the time wasn't right. We kind of wanted to grow and develop the company a little bit more, and maybe later in the run, it'd.

[Ana Garcia]

Be worth a little bit more. There we go.

[Kyle Sandler]

Really?

[Ana Garcia]

I hate to do this, but if Somebody offered you $50 million today for the idea, you would take it, wouldn't you? Yes.

[Jed Lipinski]

Ah, yes.

[Emily Boss]

This is a fine young man.

[Kyle Sandler]

That's excellent.

[Jed Lipinski]

According to Kyle, the idea wasn't just smoke and mirrors. They got genuine interest from some big healthcare brands.

[Kyle Sandler]

We did take a trip to New York on Johnson and Johnson's dime so that Taylor could pritch recmed to Johnson and Johnson, and they saw some value. We also were talking by phone and email to Walgreens.

[Jed Lipinski]

Recmed seemed like the kind of big idea that had first convinced locals to invest in the roundhouse. Investors were thrilled to think it might soon make an exit. But then nothing happened. Recmed didn't sell. Investors were appalled that Kyle had turned down a $30 million offer. They began to think that there'd never been an offer in the first place, that Kyle was lying. Which begged the question, what else was he lying about?

[Ana Garcia]

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[Jed Lipinski]

By the spring of 2016, Kyle Sandler was spending less and less time at the Roundhouse. There were a couple reasons for this. The first was that John McAfee had decided to launch a different kind of startup. Is it official?

[Ana Garcia]

Are you running for president?

[Kyle Sandler]

Have you filed the papers to run for president?

[Jed Lipinski]

I filed the papers on Tuesday. I'm officially running. Yes, ma'am.

[Kyle Sandler]

And what is your party?

[Jed Lipinski]

It's the Cyber party. When McAfee announced his bid for the presidency under his own political banner, he decided to appoint Kyle as his campaign manager.

[Emily Boss]

Kyle is like, yes, like, this is good press for us that, you know, a presidential candidate is running from the Roundhouse. I mean, how wild does that sound? And so again, he brings in the news cameras.

[Jed Lipinski]

Emily remembers the circus like atmosphere that McAfee's campaign brought to Opelika.

[Emily Boss]

And to me, I'm thinking, well, this isn't really, like, important to our mission here. You know, we're supposed to be fostering startup companies.

[Jed Lipinski]

Meanwhile, Kyle had opened a new Roundhouse location in Mobile, 200 miles away. And rumor had it he'd found a girlfriend there. The demands of running McAfee's campaign, launching a new incubator, and his budding romance kept Kyle away from Opelika for weeks on end. By now, more than 50 investors had poured close to $2 million into Kyle and the Roundhouse. They produced some promising startups, but nothing remotely on the verge of cashing out. Investors wanted to know, where is all our money actually going?

[Kyle Sandler]

We had a lot of the investors from Opelika come down and asking me, what's going on with recmed, what's going on with Opelika? Why am I not ever in Opelika? You know, I'm starting to get uncomfortable.

[Emily Boss]

So as people begin to be more angry or anxious, you know, Kyle and I have some hard conversations about what are the next steps? How are we going to get Roundhouse to be on the track of the dream that you painted for me? And I'm saying you got to work with people to get there. You need to come and meet us, meet them at the table. Let's have a meeting and get some questions answered.

[Jed Lipinski]

So Kyle scheduled a shareholders meeting to allay investors concerns.

[Kyle Sandler]

So at the beginning of October of 2016, I do come back up from Mobile for a few days. I have a shareholders meeting. Everybody comes in and I did a presentation on the video board that I, you know, was getting an annuity every year on my birthday of a million dollars. And I say, anybody that wants to be bought out, you know, I'll buy you back out for what you put in right after my birthday, which is November 24th. So you know, right around the 1st of December, I will get you guys squared away if you want to get out. Like 30 of them had said they did.

[Jed Lipinski]

Kyle told investors that the million dollar annuity was from his days at Google. But of course, Kyle had never worked at Google. There was no annuity. When you're up there talking at the shareholders meeting and you tell them that you have this annual annuity that comes to you from Google, what's going on in your head as you're telling the.

[Kyle Sandler]

Shareholders that at this point in time it's over and I know it. And I'm just trying to delay that being over as push it out as far as I can to think of the next thing.

[Jed Lipinski]

The 1st of December came and went with no news of a buyout. In Kyle's absence, Emily had taken over the Roundhouse's day to day operations. She did all the marketing, promotions and membership contracts, everything except the accounting because Kyle wouldn't give her access to the books, which was a problem because a parade of bill collectors had started showing up. Opelika Power Service threatened to turn off the lights. Emily demanded that Kyle come and meet with her in person.

[Emily Boss]

Finally, Kyle comes to the Roundhouse and he's very kind of jittery. He sits down in the co working space space and starts like kind of typing on his computer. And then he calls me and my colleague, who was our chief technical officer brings us into the office and sits us down and he slides this piece of paper across the counter to me and my colleague and he says, look, this is my Fidelity report. Like I have a lot of money in the bank, my annuities here. Like, don't worry, everything's going to be fine. We're going to buy out everybody. And my colleague looks at me and looks at Kyle and he says, that is fake. That isn't real. I saw you just now in the co working space on Photoshop, putting that Fidelity logo on there. This isn't real, Kyle. You're not real. I have never felt like a pain in my Chest. The way I felt in that moment, because that's when I knew that he was a fraud.

[Jed Lipinski]

Kyle gathered the Roundhouse employees together a few days later to announce that he was shutting the space down.

[Kyle Sandler]

At that time, you know, I confirmed to Emily, there is no money. There is no money coming in. Everything's over.

[Jed Lipinski]

Emily may have been convinced that Kyle was a fraud, but she still had trouble accepting that there was no money left.

[Emily Boss]

I still thought, okay, like. But, like, you have the money that everyone gave you. Like, don't you? I even had to pull him aside one more time, and I'm like, so you don't. You really don't have the money? Like, you don't have the money? And he was like, no, I don't.

[Jed Lipinski]

And did he say what he'd spent it on?

[Emily Boss]

No, he never said that to me.

[Jed Lipinski]

Years after that meeting with Emily, I asked Kyle the same question. Just to clarify. Where had all the money gone? Where had the $2 million investment gone?

[Kyle Sandler]

I was living a lifestyle that was well beyond my means, trying to portray an image I didn't have. And earlier, we spoke about having different cars. When it's all said and done. When I looked through some of the discovery with the FBI and everything, there was 24 cars, two houses, like, 50 trips, and anything that I wanted to buy, I bought. Outside of paying the few people that worked for me at the Roundhouse, I spent, like, every last dime on pretty much personal stuff.

[Jed Lipinski]

Not long after the Photoshop incident, Emily and the Roundhouse's two dozen small business owners showed up to find the doors locked. Kyle was nowhere to be found. Hours later, a handful of irate investors descended on the place and managed to get inside.

[Emily Boss]

They came in like a fury. I mean, I have never seen anything like it. They tore apart his office. They tore apart his file, like, pulling all his files out. They were clearly very upset and out for blood.

[Jed Lipinski]

Honestly, at that point, the Roundhouse crew finally began digging into Kyle's background, something that, in retrospect, they wish they'd done a lot sooner.

[Emily Boss]

A lot of people get their, you know, Google investigator skills on, and, you know, we're just sitting around, like, trying to piece together who this man was that we actually believed in this whole time.

[Jed Lipinski]

A quick Google search revealed that Kyle had grown up in Baltimore and had a history of fraudulent activities. He'd been convicted for attempted theft and forgery in 2010, though he'd avoided prison time. A few years later, he'd stiffed dozens of vendors and contractors for a botched tech conference. He'd organized in Memphis. Kyle had founded a few small media companies, the Droid Guy and Niblets.com, but they didn't sell for the millions he'd claimed, and there was no evidence he'd ever worked for Google. When people went looking for Kyle, they found his house empty. He appeared to have skipped town. A few weeks later, Emily got a surprise visit from a local FBI agent.

[Emily Boss]

And we sit and it's a four hour meeting with this FBI lady. And she's not what you think at all. She's wearing this, like, pink tweed suit and she's got blonde hair. I just remember thinking to myself, like, this is not what I expected. And at this point, you know, was unsure if they were going to catch him or not. You know, he was on the run. But when I left the meeting, I remember her kind of giving me this, like, look, like, don't worry, we got him.

[Jed Lipinski]

It would take another 18 months. But the FBI did finally get him. They set a trap at a car dealership in Bryan, Texas, and Kyle walked right into it.

[Kyle Sandler]

I go to the dealership to see this vehicle, and a detective from the Bryan police Department, you know, says, hey, Kyle, can I talk to you for a second? I'm Detective Shua from the Bryant Police. And I turn around and there's 20 agents back there. And that was it. That was the end.

[Jed Lipinski]

It turns out Kyle had been living under an assumed name in a small town outside Houston. The AP reported that he and a young woman had formed a startup media company with plans to sell as much as 650 million in shares with a minimum investment of $10,000. News of Kyle's arrest quickly reached Opelika.

[Emily Boss]

So on the day that they arrested Kyle, my phone starts blowing up. I mean, someone actually sends me the video of him getting arrested, and we're all just like, yeah, There were people at the bar who were cheersing to his imprisonment.

[Jed Lipinski]

Kyle ultimately pled guilty to wire fraud and securities fraud. The judge sentenced him to five years in federal prison and ordered him to return 1.9 million to his investors. By then, the investors had learned what Kyle spent their money on. The local DA told reporters that Kyle knew exactly what he was doing when he came to Opelika. John McAfee, who was then living on a boat in the Caribbean to avoid prosecution for failing to pay his taxes, tweeted a video commenting on Kyle's arrest. Good morning, everyone. The Washington Post today did a story about one of the slickest con artists.

[Ana Garcia]

I've ever met named Kyle Sandler. I met him in Opelaka, Alabama.

[Jed Lipinski]

We became friends and I got sucked.

[Emily Boss]

Into his scams like everybody else.

[Ana Garcia]

I just thought I would add my two.

[Jed Lipinski]

In prison, Kyle had a lot of time to reflect on his days in Opelika. He thought about all the people who'd believed in him and his vision for turning Opelika into a startup capital of the South. No one had believed in him more than Emily.

[Kyle Sandler]

So when I was sitting in the county jail in Montgomery, Alabama, I wrote her a letter apologizing to her for lying to her so much and how if I hadn't been so reckless and so greedy and so deceitful, that this could have been a very good thing.

[Jed Lipinski]

Emily, meanwhile, was traumatized by Kyle's deceits and the death of the Roundhouse. She felt that Kyle had exploited her ability to foster community for his own gain.

[Emily Boss]

So he used me to do that. And that's what I felt like he robbed from me was I became very closed off from the world. I became very scared to share myself with people.

[Jed Lipinski]

But with time, Emily managed to open herself back up. A local businessman leased the old roundhouse building and tapped Emily to help turn it into a co working space instead of a business incubator.

[Emily Boss]

So it was like I knew what the business model needed to be from Kyle's failures. But it was actually very hard because now we have the stain on us. The community is looking at us like, well, you guys were led by a con artist. How do you turn that around?

[Jed Lipinski]

But they did turn it around. The space now known as Colab Opelika is thriving. They've expanded to three additional locations in town with 92 companies and close to 200 members. Way more than the Roundhouse ever had.

[Emily Boss]

I've witnessed these small businesses grow and mature and move on to bigger and better spaces because we gave them a start. We gave them a very low overhead, and it's been so great for our community. And what it is now is just like the most beautiful, most proud thing I can be of, you know, it really is a community that Kyle gave me the dream. He just didn't know how to make it happen. And I did.

[Jed Lipinski]

If you have information, story tips, or feedback you'd like to share with the Gone south team, please email [e-mail] that's gonesouthpodcastmail.com we're on Facebook, TikTok and Instagram onsouthpodcast. You can also sign up for our newsletter on substack at Gone south with Jed Lipinski Gone south is an Odyssey original podcast. It's created, written and narrated by me, Jed Lipinski. Our executive producers are Jenna Weiss Berman, Maddy Sprung Keyser, Tom Lipinski, Lloyd Lockridge, and me. Our story editors are Tom Lipinski, Maddy Sprung Keyser, and Joel Lovell. Gone south is edited, mixed and mastered by Chris Basel and Andy Jaskowicz. Production support from Ian Mont and Sean Cherry. Special thanks to J.D. crowley, Leah Reese, Dennis, Maura Curran, Josephina Francis, Kurt Courtney, and Hilary Shuff. If you want to hear more of Gone south, please take a few seconds to rate and review the show. It really helps.