Business Crimes Hotline

Also as part of his plea agreement, Brabson admitted that he fabricated e-mails and other communications that purported to be internal Vans documents and which appeared both to exonerate him in the bribery scheme and implicate other Vans executives in allegations of inflated earnings made by shareholders in a class action against Vans. In a related action, Rosendahl agreed to plead guilty to the same charges.

Former Sales Chief of Public Company Charged with Securities Fraud

A former VP and Chief of Sales for the Internet Advertising Company L90, Inc., Keith Jon Kaplan, was indicted for securities fraud. According to the indictment, in the final quarter of 2000, Kaplan and two other former L90 executives were concerned that L90's total revenues for the quarter would not meet Wall Street analysts' projections. In order to meet those projections, Kaplan and his co-conspirators allegedly developed several schemes to fraudulently inflate L90's revenues. One such scheme involved a start-up Internet company, JoeDriver.com, Inc. In late 2000, JoeDriver was on the verge of failure. Nevertheless, Kaplan allegedly asked JoeDriver's founder if he wanted L90 to run Internet advertisements for the company in December 2000. Kaplan further promised that the company would not have to pay for any of the advertising unless, as a result of the advertising, JoeDriver's overall business prospects improved such that it was able to secure additional financing. Even though the company never paid for the advertising, Kaplan and his co-conspirators allegedly caused L90 to record more than $546,000 in advertising revenue from JoeDriver in the fourth quarter of 2000.

The two other co-conspirators are John C. Bohan, L90's former CEO, President, and Board Member, and Lucrezia Bickerton, L90's former VP of Finance. They previously pled guilty.

DELAWARE

Former Delaware Official Pleads Guilty to Violation of the Clean Water Act

William Daisey, the former Chief of Operations at the Delaware Department of Natural Resources and Environmental Control (DNREC) facility in Lewes, DE, pled guilty to violation of the Clean Water Act. In pleading guilty, Daisey admitted that in 2000 and 2001, he regularly directed a DNREC employee to discharge oil-contaminated water from a 350-gallon sump pit into wetlands. DNREC's Lewes facility serves as the base of operations for its Division of Soil and Water Conservation program, which is responsible for dredging Delaware's waterways and replenishing its beaches. At no time did DNREC or its Division of Soil and Water Conservation have a permit to discharge from its facility into the wetlands.

In the Courts and Business Crimes Hotline were written by Nicholas A. Oldham, Esq., Associate Editor of this publication, and an associate with Williams & Connolly LLP, Washington, DC.

CALIFORNIA

Former Shoe Company Executive Pleads Guilty to Taking Bribes from Chinese Manufacturers

Scott Andrew Brabson, a former VP of the California-based shoe company Vans Inc., pled guilty to taking bribes and kickbacks from Chinese factories that manufactured Vans shoes and clothing. According to the plea agreement, in February 1999, Brabson arranged for Vans to hire Jay William Rosendahl as a product development consultant. Brabson and Rosendahl subsequently met with owners and managers of Chinese factories and informed them that in order to continue receiving product orders from Vans, the factories would have to send kickbacks amounting to 3% of Vans' orders. Brabson and Rosendahl provided the factories with a Hong Kong bank account number, and the factories wire-transferred the kickbacks into that account.

Also as part of his plea agreement, Brabson admitted that he fabricated e-mails and other communications that purported to be internal Vans documents and which appeared both to exonerate him in the bribery scheme and implicate other Vans executives in allegations of inflated earnings made by shareholders in a class action against Vans. In a related action, Rosendahl agreed to plead guilty to the same charges.

Former Sales Chief of Public Company Charged with Securities Fraud

A former VP and Chief of Sales for the Internet Advertising Company L90, Inc., Keith Jon Kaplan, was indicted for securities fraud. According to the indictment, in the final quarter of 2000, Kaplan and two other former L90 executives were concerned that L90's total revenues for the quarter would not meet Wall Street analysts' projections. In order to meet those projections, Kaplan and his co-conspirators allegedly developed several schemes to fraudulently inflate L90's revenues. One such scheme involved a start-up Internet company, JoeDriver.com, Inc. In late 2000, JoeDriver was on the verge of failure. Nevertheless, Kaplan allegedly asked JoeDriver's founder if he wanted L90 to run Internet advertisements for the company in December 2000. Kaplan further promised that the company would not have to pay for any of the advertising unless, as a result of the advertising, JoeDriver's overall business prospects improved such that it was able to secure additional financing. Even though the company never paid for the advertising, Kaplan and his co-conspirators allegedly caused L90 to record more than $546,000 in advertising revenue from JoeDriver in the fourth quarter of 2000.

The two other co-conspirators are John C. Bohan, L90's former CEO, President, and Board Member, and Lucrezia Bickerton, L90's former VP of Finance. They previously pled guilty.

DELAWARE

Former Delaware Official Pleads Guilty to Violation of the Clean Water Act

William Daisey, the former Chief of Operations at the Delaware Department of Natural Resources and Environmental Control (DNREC) facility in Lewes, DE, pled guilty to violation of the Clean Water Act. In pleading guilty, Daisey admitted that in 2000 and 2001, he regularly directed a DNREC employee to discharge oil-contaminated water from a 350-gallon sump pit into wetlands. DNREC's Lewes facility serves as the base of operations for its Division of Soil and Water Conservation program, which is responsible for dredging Delaware's waterways and replenishing its beaches. At no time did DNREC or its Division of Soil and Water Conservation have a permit to discharge from its facility into the wetlands.

In the Courts and Business Crimes Hotline were written by Nicholas A. Oldham, Esq., Associate Editor of this publication, and an associate with Williams & Connolly LLP, Washington, DC.