12/22/1997 20:26 EST
Stock Promoter Davis Pleads Guilty
WASHINGTON (AP) -- A penny-stock promoter pleaded guilty Monday
to criminal charges of money laundering and conspiracy to commit securities and bank fraud, in the latest twist in a complex stock manipulation scheme.
The guilty plea by Barclay Davis, entered in U.S. District Court in Las Vegas, was announced by the Securities and Exchange Commission. In a civil action Monday, the SEC sought injunctions requiring Davis to repay all illegal gains, which were not specified, and barring him from being an officer or director of any publicly traded company.
Federal authorities had accused Davis of manipulating the stock price of Combined Companies International Corp. by falsifying documents and
bribing brokers.
Davis's attorney, Charles E. Kelly, didn't immediately return a telephone call seeking comment.
Combined Companies, based in Las Vegas, has at various times described itself as engaged in manufacturing and distributing medical products, recycling tires, and making and selling video games, according to the SEC. Its stock was traded on the over-the-counter Bulletin Board before being suspended earlier this year.
The company was one of several controlled by Davis and audited by
accountant Merle S. Finkel, according to federal prosecutors.
Finkel pleaded guilty in March to one count of conspiracy to commit fraud in connection with his auditing of four companies, including Combined Companies. He has been cooperating with investigators, prompting Davis to try to arrange an ''accident'' for the 67-year-old accountant in which he would be pushed down a stairway, prosecutors alleged in an indictment handed down in September.
Finkel's sentencing is scheduled for April.
The guilty plea by Davis, who also is to be sentenced in April, did not specifically address the threats to hurt Finkel. Davis had been in jail since his September arrest, but was released to 24-hour home detention with electronic monitoring. He faces a possible prison term of 51 to 63 months.
In its criminal complaint, the U.S. attorney's office in Las Vegas accused Davis of running a complex fraud scheme to manipulate the stock of Combined Companies, which he controlled though he held no official corporate office.
The complaint alleged that in 1993 Davis ordered Finkel to create a number of audit reports that falsely inflated Combined Companies' assets by $2 million. It also said he enticed an unnamed Las Vegas businessman to create false documents reflecting the existence of fictitious accounts that showed Combined Companies had some $2 million on deposit.
Davis also bribed brokers to recommend the purchase of Combined
Companies stock to investors, according to the complaint.
Finkel also allegedly helped Charles O. Huttoe, the former chairman and chief executive of Systems of Excellence Inc., falsify that company's books. Huttoe, who pleaded guilty a year ago to criminal charges of violating securities laws and engaging in money laundering, was given a 46-month prison sentence in January. |
