ZIASUNS IR GEOFFERY EITEN IN THE HOT SEAT:
According to Pollack, more than four years ago, on Sept. 6, 2006, the Massachusetts Securities Division filed a complaint against an investor relations consultant, Geoffrey Eiten, that accused him of running a "pump-and-dump" scheme involving several companies, including LocatePlus. Pollack stated that the federal government cannot claim and has not claimed that the two employees now charged ever benefited financially from Eiten's alleged schemes. Yet the federal government has refrained from any significant public action against Eiten himself, Pollack said.
"The Office of the Inspector General of the Department of Justice is separately inquiring into relationships between LocatePlus constituents and one or more individuals who have served as government officials, which may have tainted the investigation," Pollack said.
For example, Pollack said that following the departure of the former LocatePlus employees who now face charges, LocatePlus responded to the investigation without making any public disclosures about it until filing an 8-K with the SEC on Oct. 15, 2010, which stated that LocatePlus conducted an internal investigation “led by a retired former senior federal law enforcement official who previously had responsibility for corporate fraud matters nationally.”
Pollack added, "A thorough exploration into the unusual delays in the investigation and relationships between LocatePlus and the government is expected to paint a far different picture than what appears in the new claims."
On its website, LocatePLUS bills itself as the "industry leader in providing online investigative solutions to law enforcement, legal and insurance professionals, licensed investigators, and other related businesses."
According to published reports, the company in 2004 provided Blackberry wireless devices to state police at Logan International Airport, which the officers could use to access the LocatePlus database. At the time, the database contained more than 6 billion records and had data on 98 percent of the U.S. population, though the records did not include state and federal criminal justice databases or terrorist watch lists, reported the Associated Press.
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Marblehead man implicated in securites-fraud scheme
Marblehead Reporter
Posted Nov 10, 2010 @ 05:58 PM
Last update Nov 10, 2010 @ 08:13 PM
Marblehead — A Marblehead man and a former co-worker were charged today in federal court with various securities offenses arising from a scheme that allegedly involved the theft of the identity of a young man who drowned in Marblehead Harbor in 1985, among other tactics.
Jon Latorella, 47, of Marblehead, and James Fields, 43, of Brookline, were charged in an indictment with securities fraud, false statements to company auditors, false statements to the U.S. Securities and Exchange Commission, false certifications as the CEO and CFO of a publicly traded company, aggravated identity theft and engaging in unlawful financial transactions related to their management of Locateplus Holdings Corporation Inc., a Beverly-based corporation that provides access to public real estate, telephone and other records.
Latorella founded LocatePlus and became president, CEO and chairman of its board in 2002, according to the indictment. He resigned as president and CEO of LocatePlus in March 2007.
Fields was hired in LocatePlus’ finance department in 2002. In March 2003, he was named acting CFO and became CEO in May 2007, holding the position until 2009.
The indictment alleges that, starting in about 2002, Latorella, the former president and CEO of Locateplus, and Fields, the former CFO and later acting CEO of the company, engaged in several fraudulent schemes intended to artificially inflate the revenues of Locateplus, including falsifying loan documents to make it appear that a fictional entity owed Locateplus over $1 million; falsifying revenue streams to make it appear that an outside entity was paying Locateplus under the terms of a contract, when in fact the money came from Locateplus itself and other sources; deceiving the SEC to avoid having to register securities being sold by a company Latorella and Fields helped set up; using the identity of a young man who drowned in Marblehead Harbor in 1985 to fabricate both a business executive who purportedly did business with Locateplus and an investor in a company Latorella and Fields controlled; and routinely deceiving company auditors, and the SEC, to extend the fraudulent schemes and attract investment in Locateplus.
Fields' attorney Barry S. Pollack of Sullivan & Worcester LLP in Boston noted that the governments claims against his client depend on events that happened more than five years ago and called the ensuing investigation "flawed."
"These federal claims ignore or confuse roles of several others who actually guided pertinent securities and investor relations matters," he said in a statement released Wednesday evening.
According to Pollack, more than four years ago, on Sept. 6, 2006, the Massachusetts Securities Division filed a complaint against an investor relations consultant, Geoffrey Eiten, that accused him of running a "pump-and-dump" scheme involving several companies, including LocatePlus. Pollack stated that the federal government cannot claim and has not claimed that the two employees now charged ever benefited financially from Eiten's alleged schemes. Yet the federal government has refrained from any significant public action against Eiten himself, Pollack said.
"The Office of the Inspector General of the Department of Justice is separately inquiring into relationships between LocatePlus constituents and one or more individuals who have served as government officials, which may have tainted the investigation," Pollack said.
For example, Pollack said that following the departure of the former LocatePlus employees who now face charges, LocatePlus responded to the investigation without making any public disclosures about it until filing an 8-K with the SEC on Oct. 15, 2010, which stated that LocatePlus conducted an internal investigation “led by a retired former senior federal law enforcement official who previously had responsibility for corporate fraud matters nationally.”
Pollack added, "A thorough exploration into the unusual delays in the investigation and relationships between LocatePlus and the government is expected to paint a far different picture than what appears in the new claims."
On its website, LocatePLUS bills itself as the "industry leader in providing online investigative solutions to law enforcement, legal and insurance professionals, licensed investigators, and other related businesses."
According to published reports, the company in 2004 provided Blackberry wireless devices to state police at Logan International Airport, which the officers could use to access the LocatePlus database. At the time, the database contained more than 6 billion records and had data on 98 percent of the U.S. population, though the records did not include state and federal criminal justice databases or terrorist watch lists, reported the Associated Press.
If convicted on these charges, Latorella and Fields face up to 20 years of imprisonment on the securities-law violations charged in the indictment, as well as up to five years for conspiracy, up to 10 years for engaging in unlawful financial transactions and, as to the charge of aggravated identity theft, a minimum of two years imprisonment on and after any other sentence the defendants receive. The defendants would also be subject to up to three years of supervised release and a fine of up to $150,000. The government would also seek restitution for victims of the offenses in the indictment.
United States Attorney Carmen M. Ortiz, William Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division made the announcement Wednesday.
The case is being prosecuted by Assistant U.S. Attorney Andrew E. Lelling of Ortiz’s Economic Crimes Unit. During the investigation, the United States Attorney’s Office said it received valuable assistance from the U.S. Securities and Exchange Commission.
The details contained in the indictment are allegations, the U.S. Attorney's Office noted. The defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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