Video game developer sentenced for non-payment of former employees

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SALT LAKE CITY — After former workers accused a Utah video game developer of lying and not paying them, the developer has been sentenced to one year in jail and restitution of at least $1.2 million.

David M. Rushton, 57, was convicted of second-degree felony pattern of unlawful activity, third-degree felony attempted unlawful dealing with property by fiduciary and on a class-A misdemeanor for a payment of wages violation.

In total, more than $2 million in wages went unpaid.

He founded Sensory Sweep Studio, later renamed Fooptube LLC, in 2005. The company helped to develop games including well-known EA Sports franchise, "Tiger Woods PGA Tour 2005," "Street Fighter II: Hyper Fighting," and "Need for Speed: Most Wanted." Fooptube is now defunct.

Utah is a minor hub for video-game studios with about a dozen companies, including Disney Interactive Studios.

A lot of people stuck around without pay because they still had insurance and had medical problems.

–Todd Smith, former employee

"This guy had, probably, the coolest job in the world," said Utah attorney General's Office Paul Murphy. "But it's not very cool to rip off your own employees."

The Utah Attorney General's Office said the case was significant because it represented the first time a non-payment of wages situation had been criminally prosecuted in the state.

Rushton started his sentence Oct. 10 at the Salt Lake County Jail. Court records show he has a long history of failing to pay wages, payroll taxes or 401(k) contributions. He was sentenced to six months in jail in 2010 for tax fraud and racketeering.

Sensory Sweep Studio was known for churning out games quickly, taking a percentage of royalties from moviemakers and others, said former employee and developer Adam Hunter, 29.

Hunter said he "didn't know of a single person who was consistently getting paid" aside from Rushton, his children and their friends he employed as top game producers.

Former Fooptube programmer Todd Smith said he first noticed trouble when his 401K contributions started showing up months late. Then, Smith said, he and other workers realized withholdings were being used to cover payroll. Not long after that, the paychecks stopped.

Nearly half of the company's workforce, 95 workers, filed claims with the Utah Labor commission in 2009.

"If he really meant well, he wouldn't have been lying to us about the situation in the company," Smith said Thursday. "He would have told us what was really going on, and if we had the same goals we would have stuck around."

If they start seeing the employer miss a pay day or another one after that, that should send off red flags in their mind.

–Brent Asay, Wage Claim Manager

Smith said the decision to leave was difficult because Rushton was a nice guy and had been well-liked.

"He lied to us about how things were really going and the outlook for the company in order to get us to stay without pay," Smith said. "He made sure that he kept paying the insurance because a lot of people stuck around without pay because they still had insurance and had medical problems."

According to Hunter, Rushton sometimes handed out checks selectively and demanded confidentiality while blaming companies that licensed games for being slow to pay for their development or royalties.

The Utah's Labor Commission reports that 1,500 wage claim cases were filed in the last fiscal year. In 2009, when 95 of Fooptube's workers started filing, there were about 2,700.

Brent Asay, the state's Wage Claim manager, said any workers who are not receiving wages should not wait to file reports.

"If they start seeing the employer miss a pay day or another one after that, that should send off red flags in their mind," Asay said.

Contributing: The Associated Press

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Andrew Adams and Alex Cabrero


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