ARCA Space CEO Arrested on Charges of Embezzlement, Fraud

Dumitru Popescu

ARCA Space Corporation CEO Dumitru Popescu was in a New Mexico jail on Sunday night after being arrested and charged of fraud, embezzlement and forgery.

The Romanian-born Popescu faces 13 counts of fraud, five counts of embezzlement and one count of forgery, according to an online arrest report. Popescu was arrested in Jonesboro, Georgia on Nov. 8 and then extradited to Dona Ana County, New Mexico. He is being held without bond.

It’s unclear whether the charges are related to ARCA Space, which is located in Dona Ana County. The company is developing a rocket booster it plans to launch from Spaceport America.

UPDATE: The Las Cruces Sun-News has a bit more on the case:

The investigation into Popescu was conducted by the New Mexico Securities Division. The special agent in charge of the case declined to comment when reached Monday, saying the case was still ongoing.

It alleges that between May 26, 2015, and Aug. 20, 2015, and Nov. 25, 2015, and Feb. 23, 2016, Popescu “did by words or conduct make a promise that he had no intention of keeping” and “misrepresented a fact intending deceive or cheat” Michael Persico, the CEO and founder of the Chicago-based telecommunications company Anova Technologies, in an amount exceeding $20,000, according to the complaint.

The complaint also alleges that Popescu, in January 2016, defrauded more than $2,500 and embezzled more that $2,500, and that he committed securities fraud seven times during 2015 and this year.

  • Gerald R Everett

    And dis be under the “No Shit Sherlock” category. An Eastern European outfit shows up out to nowhere with a bunch of claims for really difficult technology that takes years and big money to develop. What could go wrong?

  • Mr Snarky Answer

    Yea, but they had a non-flight hardware model on a trailer…so close.

  • Hemingway

    From AP: Aerospace company CEO in New Mexico arrested for fraud

    The Associated Press
    November 13, 2017 12:17 PM
    LAS CRUCES, N.M. (AP) – The head of a New Mexico company that drew national attention for developing an electronic flying vehicle has been arrested for fraud and embezzlement.
    KVIA-TV in El Paso, Texas, reports Dumitru Popescu was arrested in Jonesboro, Georgia, last week and then extradited to southern New Mexico. He’s the CEO of Arca Space Corporation – a Las Cruces company that develops commercial space launchers.
    Popescu has been charged with five counts of embezzlement, 13 counts of fraud and one count of forgery.
    According to a criminal complaint filed in Dona Ana County District Court, Popescu lied to the Chicago-based Anova Technologies to obtain around $20,000.

    Arca Space did not immediately respond to an email from The Associated Press.
    It was not known if Popescu, who has a Romanian passport, had an attorney

  • Hemingway

    It is an embarrassment to New Mexico.

  • Mr Snarky Answer

    20K is a lot of money for $50 hobby grade IMU featured in this video.

    It’s a really cool college project…except some guy is trying to pitch it as an actual company (and apparently extract funding from people as if so)

  • Lee

    Wow, a rocket built with plywood and plexiglass and arduino style electronics modules, using amongst other tools, a Harbor Freight pop rivet gun, a hand-held belt sander, and a battery powered drill motor. What could possibly go wrong?!?!?!?

  • At least the mob wasn’t involved with this one and no one got set on fire! Is that the silver lining?

  • Mr Snarky Answer

    To be fair most of that was mold building but still, yes same net result. And they fly Raspberry Pi, not those wimpy Arduinos…

    This wasn’t going anywhere ever which is why when brought up in certain circles, eyes rolled out of heads.

  • Hemingway

    Isn’t it time for someone to investigate ARCA Space Corporation since they got money from investors? ARCA Space Corporation went through the process of Direct Public Offering under the 202X Exemption with the Regulation and Licensing Department – Securities Division of New Mexico, to offer 5,000 shares at a value of $201.35 per share. By selling the stock, the company is looking to raise $1,006,750 to be used for research and development of ArcaBoard Technology products. The company’s current evaluation registered with the Department of State is $20,135,000. This number has to be exaggerated. How is the money being spent?

  • Hemingway

    More info on the arrest of the CEO of ARCA:

  • joe tusgadaro

    No, say it ain’t so Timmy!…..

  • ArcadeEngineer

    Out of nowhere isn’t really fair; they’ve a long and well-documented history of scamming people in Romania. I couldn’t believe it when they showed up in the US acting like nothing happened, and nobody pressed them on it. They didn’t even change their name.

  • Aerospike

    The only surprise here is that it didn’t happen (a lot) sooner…

  • patb2009

    nothing wrong with much of this. We buy tools at HD.

    The difference would be adequate margins.

  • Pete Zaitcev

    It has nothing to do with being Eastern European and everything with being completely bogus. I think the “Stabilo Launch Vehicle” alone was enough to bury their credibility forever.

  • Zen_Punk

    Can you shed more light on their history in Romania?

  • ArcadeEngineer

    There’s not that much to it really. Produced lots of fibreglass engine and rocket mockups; launched a few small solid rockets; build an ‘engine test stand’ which was just some concrete blocks and never tasted anything on it; took a lot of people’s money, and just kind of faded away after revealing their final mockup, which was meant as an expendable peroxide/kerosene SSTO.
    A year or so later they showed up in the US, purporting to make hoverboards and drones, but soon they returned to their old model.

  • duheagle

    New Mexico pretty much leads the league in space-related embarrassments.

  • Aerospike

    Yeah, that one had already been their final nail in the coffin… It just took them a lot longer than expected to realize it.

  • Blakut

    I agree with ArcadeEngineer, i’ve been telling people about arca for 10 years now. They for sure embezzeled funds in romania then fled. They had dealins with the romanian navy on some launch program. Nothing cam out of it, they made a stratospheric balloon carying an empty fiber glass shell and that’s it. His followers also follow him like a cult leader, he graduated from theological universities. On ARCAs facebook page any criticism meant automatic deletion of your posts.

  • Blakut

    I wish someone in my country, Romania, would investigate them, they got hundreds of thousands from banks and the government here before disappearing to the US.

  • Abdul M. Ismail

    It was only a matter of time until scammers jumped on the “NewSpace bandwagon” because investors seem to be flocking in to finance major projects.

    While this guy is Eastern European, I’m aware of a large number of Eastern Europeans that are very honest and trying hard market legitimate ideas.

    That said, scammers come in all shapes and sizes as well as nationalities. The ‘red flag’ for me is when I read “motivational speaker” on their LinkedIn profile. That to me says they’re professional bullshitters, well versed in rhetoric and have an ability to convince other people to do the hard work for next to nothing while they promote themselves as entrepreneurs.

    My guess is, this won’t be the last time we see something like this.

  • ArcadeEngineer

    NSF user ringsider has helpfully collated the charges here;
    They include two separate counts of fraud over $20,000.

  • SamuelRoman13

    I guess no test fire this month to see if it blows up.

  • Octavian Micu

    ARCA was the company that was supposed to test Schiaparelli’s parachute (High Altitude Drop Test – HADT). Of course they did not. Blamed it on some Russian conflict on the Black Sea, if I remember correctly.

  • Enrique Moreno

    Arca: Smoke sellers since 1999

  • Blakut

    Oh this was much later, their first attempts at spaceflight in Romania included big empty tanks of plexiglas suspended by balloons, which we were supposed to believe contained rocket engines. When asked how come their rockets floated so easily on the surface of the water and to provide engine schematics and photos, they refused saying they dont want to share their secrets with the competition. :))

  • Octavian Micu

    Right, but for the Schiaparelli parachute test, I read in the papers that they got a contract of more than 1 million Euros… from ESA, of all places.

  • Blakut

    Yeah, idk how they did it.

  • Octavian Micu

    I have an idea, but I’d rather not talk about it here, since it is only a supposition! 🙂 Look at what was going on in the press about them at that time. 🙂

  • Blakut

    oh do tell, it’s the internet, nobody reads these.

  • ThomasLMatula

    It is interesting to note that I believe ARCA is the only firm that was both an Ansari X-Prize team and then part of the Google Lunar X-Prize. If this takes them under then Scaled Composites will be the last Ansari X-Prize team left.

    Remind me again of the success of the Ansari X-Prize in enabling New Space to make its Great Leap Forward.

  • ThomasLMatula

    Didn’t they also have a contract with ESA?

  • ThomasLMatula

    Sadly yes. They are so desperate for “get rich quick” economic development they fell for the X-33, VentureStar, X-Prize Cup and VG. I also remember another rocket start up from the 1990’s they built a facility for that was vapor ware, but forgot their name. A new firm makes portable buildings in the facility.

    The problem is they are always looking for short cuts instead of leveraging the actual resources they have to build a space program. If they followed the original feasibility study plan for the spaceport they be there now, but they just keep falling to the latest New Space fast talker to come along with a good sales pitch.

  • Pete Zaitcev

    It’s not a single-main-reason problem. For example, the bid selection for Spaceport America was so corrupt that one has to ask if the corruption itself was the reason for Bill Richardson to support and promote the project. What’s more, the guy who ran the spaceport tours was telling visitors how proud he was for the corrupt selection of construction contractors, because it “helped locals, not outsiders”. These people didn’t care about the state getting rich quick, they only cared about self-defeating, economically illiterate tribalism.

  • Hemingway

    ARCA just completed a stock deal for investors. Isn’t it time for someone to investigate ARCA Space Corporation since they got money from investors? ARCA Space Corporation went through the process of Direct Public Offering under the 202X Exemption with the Regulation and Licensing Department – Securities Division of New Mexico, to offer 5,000 shares at a value of $201.35 per share. By selling the stock, the company was looking to raise $1,006,750 to be used for research and development of ArcaBoard Technology products. The company’s current evaluation registered with the Department of State is $20,135,000. This number has to be exaggerated. How is the money being spent?

    It is hard to believe, but the naïve Federal government gave a contract to ARCA for its ARCABoard

    Here is a video on the stock offering:

  • Zen_Punk

    NM is gaining itself a reputation for being taken in by space hucksters.

  • Zen_Punk

    Are there are any links to news stories etc. about their past? I’ve been having trouble convincing some folks that ARCA is not on the level.

  • Mr Snarky Answer

    Any rocket scientists in the house that can tell me what happens to a combustion chamber made of fiberglass?

  • Please no jokes about him being “Roma” just because he is from Romania:

    Bob Clark

  • Hemingway

    From 2004 to the present, ARCA MEDIA has produced the following videos related to its Haas 2C rocket. There is hardly any substance to the videos. You do not see any product in production or demonstrated – just poor prototypes. ARCA MEDIA only produces animated videos of future products. Some of the videos are laughable.

    Stabilo and Helen, engine test, Video 1, 2009

    Helen rocket loaded onboard Navy ship

    2010 ARCA Team Interview | Google Lunar XPRIZE

    New ARCA facility for Haas 2C and Excelsior rocket plane, under construction, 2011

    A new milling machine was purchased by ARCA, 2011

    IAR-111 Excelsior rocket-plane capsule molds casting, 2011

    IAR-111 Excelsior cockpit airframe completion, 2011

    Excelsior rocket plane cockpit, drop test, Mission 6, Video 2, 2011

    Excelsior rocket plane, cockpit airframe, 2011

    Stabilo capsule launch, Mission 1, 2006

    Haas 2C orbital rocket, first public display, 2012

  • duheagle

    Right. Nobody comes here anymore. It’s too crowded. 🙂

  • duheagle

    True. It’s not like there’s such a shortage of ghost towns in the Old West that we have to build new ones.

  • duheagle

    I guess there’s a reason “city slickers” and “country cousins” are clichés.

  • Michael Halpern

    With all due respect to New Mexico and Oklahoma, but those aren’t exactly prime launch locations, generally you want a large body of water. To be fair to VG they are trying, slowly but they do need to pick up the pace.

  • ThomasLMatula

    White Sands Missile Range has hosted tens of thousands of launches since the 1940’s, including overland launches originating from Utah and NW New Mexico. That is far more launches than the coastal ranges have done.

    Once the bugs are worked out of RLVs economics will result in them moving inland to places like New Mexico, not only to get rid of the crazy barge landings, but also from the increased performance possible from launching at high altitude, and the reduced number of weather related launch delays.

  • Paul_Scutts

    One of the lessons to be taken home from all of this is, to “rip off” individuals and small corporations is one thing, but, to (attempt to) “rip off” (friends of) a State with it’s own police force and legal system is totally another.

  • Sorin Radu Oanea

    This was a good show

  • Mr Snarky Answer

    *if* ha

  • Michael Halpern

    true but currently the technology isnt there, almost but not quite so you want the large bodies of water, especially as you are developing the technology, as there is less potential for damage if stuff makes hard splashes (or soft splashes) as opposed to hitting the ground