U.S. Technologies CEO Accused of Fraud
Monday, March 24, 2003 · Last updated 2:21 p.m. PT
By ERIN MCCLAM
ASSOCIATED PRESS WRITER
NEW YORK -- U.S. Technologies CEO C. Gregory Earls was charged Monday with defrauding $15 million in schemes that a prosecutor called "a naked theft of investors' money."
A federal grand jury handed up a 22-count indictment charging Earls, 58, with multiple counts of securities, mail and wire fraud.
The new indictment encompasses allegations first made by federal prosecutors in December, but adds new charges related to an alleged Internet investment scheme.
"Innocent investors entrusted tens of thousands of dollars to Earls," Manhattan U.S. Attorney James Comey said. "The indictment alleges Earls repaid that trust with a naked theft of investors' money."
Earls allegedly collected $5.3 million from investors to finance an Internet company, but directed only $4 million to the company and pocketed the rest for himself, according to the new indictment unsealed in Manhattan federal court.
Federal prosecutors first charged Earls in December, when he was accused of misappropriating at least $13.8 million from USV Partners, a company that was investing in U.S. Technologies.
Some of that money was redirected to an educational trust for Earls' children and his ex-wife, and some of it repay investors from other business ventures, authorities say.
After the first indictment, Earls was released on $500,000 bail and returned to his home in Washington, D.C. His lawyer, Thomas Green, called the charges "overblown and substantially embellished."
Green could not immediately be reached for comment on the new charges.
U.S. Technologies' accounting problems led former FBI director William Webster to resign in November as head of a special accounting oversight board created by Congress to restore investor confidence.
Webster's role at U.S. Technologies came into question after it was learned he fired the firm's outside auditors last year when he headed the board of directors' auditing committee.
The controversy also led to Securities and Exchange Commission Chairman Harvey Pitt's resignation in November.
---
On the Net:
U.S. Technologies Inc.: usxx.com |
