Here's another from the Tampa Bay Business Journal
HEADLINE: Former Marshall associate Fradella indicted in Texas case
BYLINE: Jane Meinhardt
BODY:
TAMPA - A federal civil lawsuit alleging Tampa businessman Brian Marshall and some former associates committed securities fraud has been partially stayed to allow a parallel criminal investigation of similar accusations.
The civil lawsuit filed in Texas in November 2009 by the U.S. Securities and Exchange Commission alleges Marshall, Frank Fradella and some associates were illicitly enriched by engaging in a "fantasy of fraud" to inflate the stock price of Home Solutions of America, a now-defunct Texas restoration company that purchased Marshall's flagship business, Fireline Restoration Inc. in Tampa, in a $50 million deal.
As part of the 2006 deal, Fireline became Home Solutions' largest subsidiary with Marshall as its president for a base salary of $300,000 a year. He also became a director of Home Solutions where Fradella was chief executive officer.
The ongoing case now has evolved into a criminal proceeding.
A grand jury in the Northern District of Texas indicted Fradella on May 4 on criminal charges based on some of the same acts and transactions alleged in the SEC civil complaint that also names Marshall and others as defendants.
Marshall was not named as a defendant in the indictment.
Because the allegations in the indictment are similar - and in some instances identical - to those made by the SEC, the criminal matter is being allowed to proceed first to avoid premature disclosure of evidence that could impair prosecution, court records state.
Attempts to reach Fradella for comment were not successful. Michael Gibson, his Dallas lawyer, did not return a call seeking comment.
The indictment alleges Fradella engaged in schemes to inflate Home Solutions' revenue, committed fraud in the form of insider trading, falsely certified the accuracy of the company's financials and deceived the company's auditors.
Fradella pleaded not guilty at his June 9 arraignment.
Representatives of the U.S. attorney's office were not immediately available for comment.
Marshall, who is not represented by a lawyer in the SEC case, could not be reached.
Tampa lawyer James A. Schmidt, who has represented Marshall in other matters, conferred with the U.S. attorney's office regarding the stay but had no comment.
"My involvement is so limited," Schmidt said. "There is really nothing I can add."
While some Tampa Bay area subcontractors continue to seek payment of what they contend Marshall's restoration companies owe them, the SEC also wants to collect money from him.
The agency is seeking a default judgment against Marshall for not responding to its civil lawsuit filed against him, Fradella and others nearly 18 months ago.
If the federal court grants the SEC's June 6 motion for a default judgment, the allegations of fraud and other accusations in its complaint against Marshall would be deemed admitted, court records show.
The SEC lawsuit contends that Marshall, in concert with others, embarked on a revenue-inflation scheme in 2006 and 2007 involving $9 million of bogus revenue between Fireline and private entities Marshall controlled.
The SEC wants the judgment to include disgorgement of more than $111,000 and seeks a judge's order for Marshall to pay the maximum in civil penalties in an amount to be determined, court records state.
Court records show that Marshall's lifestyle has included gambling in Las Vegas and spending thousands at strip clubs there, luxury cars and yachts, California beachfront homes and Neiman Marcus shopping sprees, and that lenders and his former wife are waiting in line for payment.
His ex-wife contends Marshall owes more than $80,000 in back child support.
Meanwhile, his businesses are not exactly flourishing.
Eight companies Marshall owns are in Chapter 7 liquidation in Tampa bankruptcy court. |
