Did you read this story tout? BTW, on another topic,who is Scott Zimmerman?
nypost.com
August 20, 2003 -- The four top executives of a New Jersey-based medical supply company have pleaded guilty to a multi-million-dollar securities fraud scheme first brought to light by The Post 18 months ago. The officials, of Lakewood, N.J.'s Medi-Hut Corp., entered their pleas yesterday in Newark federal court.
COURT DRAMA: Medi-Hut defendants (bottom) (l to r) Vincent Sanpietro, Lawrence Marasco, Joseph Sanpietro and Lawrence M. Simon plead guilty before Judge Jose Linares and U.S. Attorney Robert Kirsch.
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August 20, 2003 -- The four top executives of a New Jersey-based medical supply company have pleaded guilty to a multi-million-dollar securities fraud scheme first brought to light by The Post 18 months ago.
The officials, of Lakewood, N.J.'s Medi-Hut Corp., entered their pleas yesterday in Newark federal court.
A spokesman for the U.S. Attorney's office said The Post played "a very substantial role" in bringing the case to a succesful conclusion.
Three of the group pleaded guilty to a conspiracy to inflate the company's revenues and earnings while lying to investigators.
The fourth pleaded guilty to obstruction of justice. Each faces a maximum of five years in prison and a fine of $250,000.
Medi-Hut, which distributes medical devices, personal hygiene items, and over-the-counter drugs, was founded in 1982 by two brothers, Joseph and Vincent Sanpietro.
In 1998 the brothers merged their company into the shell of a defunct Utah penny stock and thereby acquired a listing as a public company on the Nasdaq electronic stock market.
By the beginning of 2002, Medi-Hut's stock had soared from pennies to nearly $14 per share on revenue growth that appeared to have surged 15-fold in scarcely three years.
But a review by The Post of the public record financial statements that Medi-Hut had been filing with the Securities and Exchange Commission revealed that the reported revenue gains were fraudulent.
In reality, the bulk of Medi-Hut's reported revenues consisted of claimed sales to a company whose only known place of business turned out to be a 1,200-square foot storage locker in Farmingdale, L.I.
The lease on the premises had been signed by Medi-Hut's vice president of marketing, Lawrence Marasco, one of the four defendants in yesterday's court action.
In the wake of The Post's disclosures, Medi-Hut's stock collapsed, and the company threatened legal action against the newspaper. But coverage by The Post continued, revealing a web of suspicious transactions in which Medi-Hut's customers turned out to be its suppliers as well. |
