Investigator gets prison time for business fraud
Tue Apr 17, 2007 12:17 PM ET
NEW YORK, April 17 (Reuters) - A Montana man who admitted to posing as a private eye to double deal parties in high-profile corporate litigation cases was sentenced on Tuesday to 37 months in prison and ordered to pay $307,103 in restitution.
Michael Lair, 46, pleaded guilty in February to four counts of wire fraud. Prosecutors said he took payments from parties in lawsuits by claiming to have incriminating information relevant to the cases that he didn't have.
None of the companies he defrauded were named in the indictment, but in court on Tuesday, U.S. District Judge John Keenan said Lair's targets included American Express Co. <AXP.N>, Biovail Corp. <BVF.TO>, Oracle Corp. <ORCL.O> and Overstock.com <OSTK.O>.
Keenan ordered Lair's computer use to be closely monitored following his release from prison.
"He flimflammed some pretty sophisticated outfits and I think it's important that his computer operations be monitored," the judge said.
From February 2003 to October 2006, Lair represented himself as the head of the Web-based company, Consumerdefense.com Inc., which claimed to conduct research in connection with consumer complaints.
According to the indictment, Lair approached lawyers representing one party, claiming to have incriminating evidence, including proof of illegal activity, about the opposing party.
Lair would then approach the opposing lawyers with the claim that he had been solicited by the first party to engage in illegal and unethical conduct.
As part of the scheme, Lair would request cash payments before turning over any of the purported evidence. But Lair could not deliver on his promises because he did not actually have the information he claimed to have, prosecutors said.
In one instance, Lair extracted a payment of $50,000 for an exchange he never delivered on.
At his sentencing, Lair apologized to the victims and to his family.
"I'm looking forward to making restitution and getting on with my life," he said.
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