ASSOCIATED PRESS
2:38 p.m. March 2, 2004
LOS ANGELES – The former CEO of technology firm eConnect was sentenced to more than eight years in prison for overseeing a scheme that defrauded investors of $4.1 million by artificially inflating the company's stock price, officials said Tuesday.
Thomas Hughes, 56, was sentenced late Monday in federal court, the U.S. attorney's office said in a statement.
Hughes, of Rancho Palos Verdes, pleaded guilty last August to three counts of securities fraud for distributing false press releases and making misleading statements on the company's Web site.
He also pleaded guilty to one count of criminal contempt of court for violating a 2000 federal injunction issued by the Securities and Exchange Commission by spreading misleading information about the company.
Hughes had faced up to 30 years in prison on the securities fraud charges and an indefinite maximum sentence on the contempt count, officials said. He received a sentenced of eight years and one month.
The Los Angeles-based company developed electronic payment software and hardware. Prosecutors say Hughes helped send out press releases claiming that eConnect had obtained a $20 million investment in quality asset-backed bonds and started a stock repurchase program.
In reality, the bonds had little value and no stock buyback program existed, prosecutors said.
eConnect has since come under new management and changed its name to EyeCashNetworks, prosecutors said.
Officials at the firm, which provides services for making payments through the Internet, are not charged with wrongdoing. |
