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Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (2634)	3/25/2003 9:31:12 AM
From: Glenn Petersen	Respond to of 3602

U.S. Technologies CEO indicted Earls charged with multiple counts of fraud By Associated Press, 3/25/2003 boston.com NEW YORK -- U.S. Technologies chief executive C. Gregory Earls was charged yesterday with defrauding investors of $15 million in schemes that a prosecutor called ''a naked theft.'' A federal grand jury handed up a 22-count indictment charging Earls, 58, with multiple counts of securities, mail, and wire fraud. The new indictment encompasses allegations first made by federal prosecutors in December, but adds new charges related to an alleged Internet investment scheme. ''Innocent investors entrusted tens of thousands of dollars to Earls,'' Manhattan US Attorney James Comey said. ''The indictment alleges Earls repaid that trust with a naked theft of investors' money.'' Earls allegedly collected $5.3 million from investors to finance an Internet company, but directed only $4 million to the company and pocketed the rest for himself, according to the new indictment unsealed in Manhattan federal court. Earls's attorney, Thomas Green, did not immediately return a telephone call for comment. Federal prosecutors first charged Earls in December, when he was accused of misappropriating at least $13.8 million from USV Partners, a company that was investing in U.S. Technologies. Some of that money was redirected to an educational trust for Earls's children and his ex-wife, and some of it went to repay investors from other business ventures, authorities say. After the first indictment, Earls was released on $500,000 bail and returned to his home in Washington, D.C. At the time, Green called the charges ''overblown and substantially embellished.'' Washington, D.C.-based U.S. Technologies once focused on providing contract labor using prison inmates -- managing their production of electronics, furniture, and other goods. The company has since expanded to develop its e-commerce business and focus on technology consulting. U.S. Technologies' accounting problems led former FBI director William Webster to resign in November as head of a special accounting oversight board created by Congress to restore investor confidence. Webster's role at U.S. Technologies came into question after it was learned that he fired the firm's outside auditors last year when he led the board of directors' auditing committee. The controversy also led to Securities and Exchange Commission Chairman Harvey Pitt's resignation in November. The 22 counts in the indictment carry a total maximum sentence of 110 years in prison, but Earls would likely get much less under federal sentencing guidelines if he were convicted at trial. Earls did not immediately have a new hearing date in Manhattan federal court. This story ran on page D2 of the Boston Globe on 3/25/2003. © Copyright 2003 Globe Newspaper Company.