Business Crimes Hotline

CALIFORNIA

Investment Banker Sentenced for Insider Trading

Ernesto V. Sibal, a former associate at the investment banking firm Chanin & Company LLC, was sentenced to 18 months in prison for insider trading.

Sibal had previously pleaded guilty to conspiring to commit securities fraud and wire fraud for obtaining inside information about mergers and acquisitions of publicly traded companies. Specifically, Sibal used non-public information obtained from two investment banking firms to trade in the stocks in which he had information. As a result of the scheme, Sibal yielded nearly $1 million, all of which he agreed to forfeit to the government. He was also sentenced to 18 months in prison.

CEO Pleads Guilty to Fraud for Lying to Investors

Hubert Allen Jeffreys, the former president and CEO of Costa Mesa-based Earthboard Sports USA, Inc., pleaded guilty to federal fraud charges, admitting that he had lied to investors about a potential merger.

Jeffreys, who was also the founder of Earthboards (a skateboard manufacturer), made repeated declarations to investors about a merger with a major publicly traded company. The declarations spanned several months and included calling the proposed deal, among other things, “a definitive agreement” purportedly “with a publicly-traded major footwear manufacturer.” Jeffreys later allegedly said, “we still have a deal” and “it's like being on the 98-yard line.” The investors believed the acquiring company to be Vans, Inc, a company trading at approximately $15/share. Neither Vans nor any other company, however, was seeking to merge or acquire Earthboard. Instead, Jeffreys allegedly lied to investors about the potential merger in an effort to secure further investments. As a result of the scheme, Earthboard investors lost approximately $2 million. Jeffreys faces 20 years in prison.

DISTRICT OF COLUMBIA

CPAs Sentenced to Prison for Implementing Illegal Tax Shelters

Tara LeGrand and Lynden Bridges, CPAs formerly with Anderson's Ark & Associates (AAA), were sentenced for aiding and assisting in the preparation and filing of fraudulent income tax returns.

Acording to the government, AAA, an accounting firm that allegedly sold fraudulent investments and tax shelters, had approximately 1500 clients, approximately 300 of whom reported tax deductions over $120 million. After an investigation, LeGrand, Bridges and several other associates went to trial. Several associates were convicted and faced prison terms from 7 to 20 years. The jury deadlocked on LeGrand and Bridges, who pleaded guilty after the jury was unable to reach a verdict. As part of the plea agreement, LeGrand and Bridges admitted that they had prepared and filed for their clients tax returns that implemented a tax-evasion program called “Look Back.” AAA had been previously tied to selling two tax shelters called “Look Back” and “Look Forward” in which phony partnerships allegedly were created in order to record false partnership losses and business expenses. As a result of the plea agreement, LeGrand was sentenced to 24 months in prison and Bridges was sentenced to 18 months.

CALIFORNIA

Investment Banker Sentenced for Insider Trading

Ernesto V. Sibal, a former associate at the investment banking firm Chanin & Company LLC, was sentenced to 18 months in prison for insider trading.

Sibal had previously pleaded guilty to conspiring to commit securities fraud and wire fraud for obtaining inside information about mergers and acquisitions of publicly traded companies. Specifically, Sibal used non-public information obtained from two investment banking firms to trade in the stocks in which he had information. As a result of the scheme, Sibal yielded nearly $1 million, all of which he agreed to forfeit to the government. He was also sentenced to 18 months in prison.

CEO Pleads Guilty to Fraud for Lying to Investors

Hubert Allen Jeffreys, the former president and CEO of Costa Mesa-based Earthboard Sports USA, Inc., pleaded guilty to federal fraud charges, admitting that he had lied to investors about a potential merger.

Jeffreys, who was also the founder of Earthboards (a skateboard manufacturer), made repeated declarations to investors about a merger with a major publicly traded company. The declarations spanned several months and included calling the proposed deal, among other things, “a definitive agreement” purportedly “with a publicly-traded major footwear manufacturer.” Jeffreys later allegedly said, “we still have a deal” and “it's like being on the 98-yard line.” The investors believed the acquiring company to be Vans, Inc, a company trading at approximately $15/share. Neither Vans nor any other company, however, was seeking to merge or acquire Earthboard. Instead, Jeffreys allegedly lied to investors about the potential merger in an effort to secure further investments. As a result of the scheme, Earthboard investors lost approximately $2 million. Jeffreys faces 20 years in prison.

DISTRICT OF COLUMBIA

CPAs Sentenced to Prison for Implementing Illegal Tax Shelters

Tara LeGrand and Lynden Bridges, CPAs formerly with Anderson's Ark & Associates (AAA), were sentenced for aiding and assisting in the preparation and filing of fraudulent income tax returns.

Acording to the government, AAA, an accounting firm that allegedly sold fraudulent investments and tax shelters, had approximately 1500 clients, approximately 300 of whom reported tax deductions over $120 million. After an investigation, LeGrand, Bridges and several other associates went to trial. Several associates were convicted and faced prison terms from 7 to 20 years. The jury deadlocked on LeGrand and Bridges, who pleaded guilty after the jury was unable to reach a verdict. As part of the plea agreement, LeGrand and Bridges admitted that they had prepared and filed for their clients tax returns that implemented a tax-evasion program called “Look Back.” AAA had been previously tied to selling two tax shelters called “Look Back” and “Look Forward” in which phony partnerships allegedly were created in order to record false partnership losses and business expenses. As a result of the plea agreement, LeGrand was sentenced to 24 months in prison and Bridges was sentenced to 18 months.