Securities fraud suspect nabbed at New York's JFK airport
Securities fraud suspect nabbed at New York’s JFK airport

A former board member for a health care services firm faces charges of securities fraud following his arrest last month. According to federal investigators, the man conspired with three other individuals to defraud a private investment firm. Central to the scheme was a plan to take a publicly traded New Jersey health care company private. He and other three conspirators persuaded the private investment firm to put up $82 million to partially purchase the company. A group of lenders provided an additional $130 million.

Federal authorities say that the conspirators grossly inflated the value of the company through fraud. One element included the purchase of a number of subsidiary companies. In reality, the subsidiaries did not exist or did not produce their stated incomes. The conspirators transferred money among the fraudulent subsidiaries to give the appearance of operating capital and revenue. As part of the ruse, the conspirators constructed falsified financial documents, including bank statements, customer lists and revenue streams.

The fraud enticed the private investment firm and the lending institutions to overvalue the company at $300 million. The overvaluation was the basis of investments and loans to take the parent company private.

In September 2017, the conspirators either resigned from their positions or were terminated. At that time, regulators detected the fraud. In March 2018, the parent company filed for bankruptcy protection, citing the fraudulent manipulation of the company’s worth. Federal authorities charged another conspirator, the former CEO of the parent company, with securities fraud in May 2018. US federal authorities have declared two of the conspirators to be fugitives.

Securities fraud lawyer

When you face investment fraud charges, hire an experienced securities fraud lawyer like Robert Helfend. Mr. Helfend has nearly 35 years of experience in federal criminal defense. He takes defense cases in any federal circuit in the United States.

Federal defendants often think their only option is to plead guilty. While federal prosecutors have a high conviction rate, a plea deal isn’t always your best strategy. Don’t rely on inexperience and don’t assume that a plea deal is in your best interest.

Contact Robert Helfend or call toll-free at (800) 834-6434, (310) 456-3317, (818) 591-2809 or (805) 273-5611 for an immediate consultation on your Los Angeles County securities fraud case.

Photo Credit: Wally Gobetz, via Flickr.com

Comments are closed.