Suburban company accused of fraud
By Paul Meincke
March 13, 2003 — Prosecutors filed fraud charges against five top officers in a suburban multi-media company. It's alleged that financial shenanigans cost a thousand jobs and robbed investors of millions.
Anicom Incorporated was a distributor of multi-media wire and cable products. While this building still wears its name, the company is gone, and with it 1200 hundred jobs. On Thursday Anicom's top five officers and a sixth employee were indicted in a fraud scheme accusing them of cooking the company's books.
"This corporate fraud perpetrated by Anicom's officers and senior managers was a scheme to manage the company's earnings, to make the company more attractive in an acquisition target," said Mary Keefe, Securities and Exchange Commission.
Anicom's President and CEO Carl Putnam, and chief financial officer Donald Welchko are charged with securities and bank fraud, making false statements to investigators. The company's chief operating officer, vice presidents of sales and accounting, and billing manager are all charged with of securities fraud. Prosecutors say they simply made up numbers--sales that never happened, earnings overstated, losses that were hidden.
"The clearest examples alleged are in 1998 the largest sale made by Anicom did not exist. In fact, in 1998 three of the 10 largest sales reported by Anaicom on the books did not happen," said Patrick Fitzgerald, U.S. attorney.
The fraud was so pervasive, prosecutors say, that the company Anicom listed as its best customer in 1999 is a made up name.
"The activity by this company was appalling people lost their jobs. People lost investments and banks lost money. And you know, again, it just gets down to corporate greed," said Thomas J. Kneir, FBI special agent in charge.
Shortly after Anicom declared bankruptcy two years ago, 1,200 people lost their jobs, investors lost an estimated $80 million-- among them the Wisconsin State Pension Board, which lost 23-million. |
