Off Topic: Re Cabot stocks
If anyone patricipated in the Centennial Technologies fiasco, I just came across this article .
BOSTON, Mass., Oct 30 (Reuters) - The former chief executive of Centennial Technologies Inc <CTN.CN> and four others were charged on Thursday with securities fraud stemming from a revenue-boosting scheme, the U.S. Attorney for Boston said Thursday.
Emanuel Pinez, the former CEO of the computer card maker, was also charged with two counts of insider trading and nine counts of money laundering, said U.S. Attorney Donald Stern.
A federal grand jury returned a 23 count conspiracy and securities fraud indictment against Pinez; James Murphy, Centennial's former chief financial officer; Robert Silva, currently Centennial's sales manager and its former vice president of sales and Robert Lockwood, the CEO of Presage Corp, whose BBC Computer division was involved in sham sales of a phoney Centennial product.
A fifth defendant, Bond Fletcher, former chief operating officer of Centennial and now president of Media Jet Inc, a Centennial customer, is charged with four counts of aiding and abetting securities fraud.
The indictments supersede a five-count indictment returned in March, charging Pinez with securities fraud, including insider trading.
The Securities and Exchange Commission separately filed civil charges stemming from the same allegations against Fletcher and Media Jet.
Stern said that Pinez orchestrated a conspiracy in which Centennial include some $13 million of revenue from phoney sales over a period of 11 fiscal quarters. He said Stern acted with the others in the scheme to defraud investors.
According to the indictment, the scheme, which took place from June 1994 to Decmeber 1996, included false financial performance disclosed in SEC filings, hyped announcements about company activities and non-existent sales contracts.
The contracts were designed to create the illusion of a company prospering with millions of sales, including more than $2.0 million through a fictional product called "Flash 98."
Also involved were the production of thousands of dummy computer cards to fool Centennial's outside auditors about the value of the company's inventory and shipment of the cards to accomplices to create shipping records for the fake sales.
Each defendant faces a maximum prison term of five years and a fine of $250,000 for each count.
In addition, Pinez, who has been in federal custody since February 14, faces a maximum of 20 years in prison and a $500,000 fine for each of the five counts of money laundering and 10 years in prison and a $250,000 fine for each of the two money laundering counts.
None of the defendants or their lawyers could be reached.
A Centennial spokesman was not immediately available to comment.
REUTERS
16:57 10-30-97 |
