NYC jury convicts ex-CEO in $110 million fraud

Discussion in 'Media' started by hvactec, Jul 20, 2011.

  1. hvactec
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    hvactec VIP Member

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    Tue Jul 19, 2011 6:52pm EDT

    * James Margulies convicted on 30 counts

    * Margulies was CEO of Industrial Enterprises of America

    * Margulies' predecessor testified against him

    By Jonathan Stempel

    NEW YORK, July 19 (Reuters) - A Manhattan jury convicted a former Industrial Enterprises of America Inc (IEAM.PK) chief executive on Tuesday of stealing more than $110 million from the chemicals company and its investors, prosecutors said.

    James Margulies, 47, was convicted on 30 felony counts, including grand larceny, scheming to defraud, conspiracy falsifying business records, and violating the Martin Act, a state law used to combat securities fraud.

    Sentencing is scheduled for Aug. 9, according to the office of Manhattan District Attorney Cyrus Vance Jr, which announced the conviction.

    John Mazzuto, who preceded Margulies as chief executive, pleaded guilty in January to four felony counts over the same scheme. He testified against Margulies at the six-week trial before New York State Supreme Court Justice Gregory Carro. Mazzuto has yet to be sentenced.

    Lawyers for Margulies did not immediately return calls seeking comment.

    According to prosecutors, Margulies ran a "pump-and-dump" scheme from 2004 to 2008 in which he fraudulently issued 43 million Industrial Enterprises shares totaling more than $90 million and used the proceeds to inflate the Pittsburgh-based company's balance sheet.

    They said the Cleveland resident then sold his stock at inflated prices to bankroll a lavish lifestyle, including expensive homes, a $350,000 ring for his wife, a $500,000 vacation club membership and private jet travel.

    Investors including an Ohio teachers' pension fund and the Methodist Church lost more than $20 million, prosecutors said.
    full story NYC jury convicts ex-CEO in $110 million fraud | Reuters
     
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  2. editec
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    editec Mr. Forgot-it-All

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    Always nice to read when some white collar criminal gets collared.

    Now I wonder if he'll serve more time than some kid who got caught with a quarter pound of dope?

    I doubt it.
     
  3. Sallow
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    Sallow The Big Bad Wolf. Supporting Member

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    $110 mil?

    Betcha they are cutting benefits too.. :lol:
     

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