Business Crimes Hotline

Greely admitted that he had opened two UBS bank accounts in Switzerland in the names of Cayman Island entities that he owned and for which he directed the financial transactions. The two accounts peaked with net asset balances of over $2.8 million and over $12.6 million, respectively. Greely also admitted that he earned more than $700,000 in interest on the accounts from 2003 to 2008, none of which he reported on U.S. tax returns.

Greely's plea also included the admission that he had failed to disclose the existence of the accounts on his tax returns, and failed to file the Report of Foreign Bank and Financial Accounts (“FBAR”) required by the U.S. Treasury for any foreign account containing more than $10,000. In addition to the plea itself, Greely agreed to pay a civil penalty of more than $6.8 million for his failure to file the FBAR. The court will sentence him on Nov. 9, 2011.

COLORADO

Grain Elevator Company Gets Five Years' Probation for Death of Teenaged Employee

On Aug. 5, 2011, Temple Grain Elevators was sentenced to five years' probation and ordered to pay $550,000, including primarily payments to the family of 17-year-old Cody Rigsby.

On May 29, 2009, Rigsby was killed while working in a grain elevator in Haswell, CO. Following his death, the company was charged with criminal violations of Occupational Safety and Health Administration (“OSHA”) regulations, violations that allegedly led to the accident. As a part of the plea agreement, the company admitted that it knew about certain hazardous practices in violation of OSHA regulations, including the lack of proper safety harnesses and rescue equipment. In addition, the company admitted it had failed to provide any safety training to teen-agers, despite their limited experience working in the grain industry.

Of the money paid, $430,000 will go toward a structured annuity to benefit the victim's family, $70,000 will go directly to the victim's mother as a personal injury benefit, and $50,000 will be fines to OSHA. The company agreed to be subject to a number of terms of probation, including the requirement that it will no longer employ individuals under the age of 18, formerly a common practice.

FLORIDA

Telecommunications Executives Convicted of Bribing Haitian Officials

Joel Esquenazi and Carlos Rodriguez, the former president and executive vice president, respectively, of Terra Telecommunications Corp. (“Terra”), were convicted of several counts related to bribery of officials at Telecommunications D'Haiti S.A.M. (“Haiti Telecom”). Esquenazi and Rodriguez were convicted of one count of conspiracy to violate the Foreign Corrupt Practices Act (“FCPA”) and commit wire fraud; seven counts of substantive FCPA violations; one count of conspiracy to launder money; and 12 counts of substantive money-laundering violations.

Haiti Telecom, a state-owned Haitian telecommunications company, is the sole provider of land-line telephone service in Haiti. Terra contracted with Haiti Telecom so its customers could call Haiti.

The government alleged that the two executives were part of a three-and-a-half year scheme through which they had Terra pay over $890,000 to bribe Haiti Telecom officials, specifically the directors of international relations. The government demonstrated that the purpose of the payments was to obtain advantages, such as preferred rates.Terra went to some length to conceal the payments ' they were made through shell companies and Terra created records showing that the payments were for consulting services that were never received.

Several others had previously pleaded guilty in relation to the scheme. Antonio Perez, Terra's former controller, pleaded guilty to one conspiracy count and was sentenced to 24 months in prison. Juan Diaz, president of J.D. Locator Services, and Jean Fourcand, president of Fourcand Enterprises, Inc., both pleaded guilty to conspiracy for receiving bribe money. Robert Antoine, former director of international affairs at Haiti Telecom, also pleaded guilty for receiving bribe money. Several others have been indicted in relation to the scheme but those trials have not yet been set.

The convictions followed a two-and-a-half week trial. The court will sentence both defendants on Oct. 13, 2011.

TEXAS

Former Triton CEO Convicted of Fraud

A Western District of Texas jury, on Aug. 17, 2011, convicted Kurt Branham Barton, former CEO of Triton Financial LLC, on numerous counts related to a Ponzi scheme.

The government alleged that Barton had, over the course of four years, represented to his investors ' from family members to NFL players ' that he was investing their money even though he actually used the money to pay prior investors or invest in other ventures. As a part
of the scheme, Barton created phony account statements and investments. Ultimately, he defrauded investors out of more than $50 million. Barton was convicted on more than 30 counts.

WASHINGTON, DC

Former NASDAQ Director Sentenced to 42 Months

Donald Johnson was a managing director at NASDAQ's market intelligence desk in New York from 2006 to 2009. As a part of this role he oversaw the desk that provided analysis and information to companies that traded on the NASDAQ exchange and, specifically, provided information to companies regarding trading in their own stock. During those interactions, companies would provide Johnson with material, non-public information.

As a part of his guilty plea to one count of securities fraud, on May 26, 2011, Johnson admitted that he had used this non-public information on at least eight occasions to either purchase or short sell the stock of these companies before they made the information public. Johnson would then reverse his transaction shortly after the information was made public to realize the profits. To hide the transactions, Johnson used an account in his wife's name.

On Aug. 12, 2011, Judge Anthony J. Trenga in the Eastern District of Virginia sentenced Johnson to serve 42 months in prison and ordered him to forfeit $755,066. Johnson is also facing a civil enforcement action filed by the Securities and Exchange Commission (“SEC”) in New York.

Business Crimes Hotline and In the Courts were written by Associate Editor Kenneth S. Clark and Matthew J. Alexander, respectively. Both are associates at Kirkland & Ellis LLP, Washington, DC.

CALIFORNIA

More Than $6.8 Million Paid in Plea Agreement

Robert E. Greely, of San Francisco, pleaded guilty before Judge Charles R. Breyer to one count of filing a false federal income tax return for 2008.

Greely admitted that he had opened two UBS bank accounts in Switzerland in the names of Cayman Island entities that he owned and for which he directed the financial transactions. The two accounts peaked with net asset balances of over $2.8 million and over $12.6 million, respectively. Greely also admitted that he earned more than $700,000 in interest on the accounts from 2003 to 2008, none of which he reported on U.S. tax returns.

Greely's plea also included the admission that he had failed to disclose the existence of the accounts on his tax returns, and failed to file the Report of Foreign Bank and Financial Accounts (“FBAR”) required by the U.S. Treasury for any foreign account containing more than $10,000. In addition to the plea itself, Greely agreed to pay a civil penalty of more than $6.8 million for his failure to file the FBAR. The court will sentence him on Nov. 9, 2011.

COLORADO

Grain Elevator Company Gets Five Years' Probation for Death of Teenaged Employee

On Aug. 5, 2011, Temple Grain Elevators was sentenced to five years' probation and ordered to pay $550,000, including primarily payments to the family of 17-year-old Cody Rigsby.

On May 29, 2009, Rigsby was killed while working in a grain elevator in Haswell, CO. Following his death, the company was charged with criminal violations of Occupational Safety and Health Administration (“OSHA”) regulations, violations that allegedly led to the accident. As a part of the plea agreement, the company admitted that it knew about certain hazardous practices in violation of OSHA regulations, including the lack of proper safety harnesses and rescue equipment. In addition, the company admitted it had failed to provide any safety training to teen-agers, despite their limited experience working in the grain industry.

Of the money paid, $430,000 will go toward a structured annuity to benefit the victim's family, $70,000 will go directly to the victim's mother as a personal injury benefit, and $50,000 will be fines to OSHA. The company agreed to be subject to a number of terms of probation, including the requirement that it will no longer employ individuals under the age of 18, formerly a common practice.

FLORIDA

Telecommunications Executives Convicted of Bribing Haitian Officials

Joel Esquenazi and Carlos Rodriguez, the former president and executive vice president, respectively, of Terra Telecommunications Corp. (“Terra”), were convicted of several counts related to bribery of officials at Telecommunications D'Haiti S.A.M. (“Haiti Telecom”). Esquenazi and Rodriguez were convicted of one count of conspiracy to violate the Foreign Corrupt Practices Act (“FCPA”) and commit wire fraud; seven counts of substantive FCPA violations; one count of conspiracy to launder money; and 12 counts of substantive money-laundering violations.

Haiti Telecom, a state-owned Haitian telecommunications company, is the sole provider of land-line telephone service in Haiti. Terra contracted with Haiti Telecom so its customers could call Haiti.

The government alleged that the two executives were part of a three-and-a-half year scheme through which they had Terra pay over $890,000 to bribe Haiti Telecom officials, specifically the directors of international relations. The government demonstrated that the purpose of the payments was to obtain advantages, such as preferred rates.Terra went to some length to conceal the payments ' they were made through shell companies and Terra created records showing that the payments were for consulting services that were never received.

Several others had previously pleaded guilty in relation to the scheme. Antonio Perez, Terra's former controller, pleaded guilty to one conspiracy count and was sentenced to 24 months in prison. Juan Diaz, president of J.D. Locator Services, and Jean Fourcand, president of Fourcand Enterprises, Inc., both pleaded guilty to conspiracy for receiving bribe money. Robert Antoine, former director of international affairs at Haiti Telecom, also pleaded guilty for receiving bribe money. Several others have been indicted in relation to the scheme but those trials have not yet been set.

The convictions followed a two-and-a-half week trial. The court will sentence both defendants on Oct. 13, 2011.

TEXAS

Former Triton CEO Convicted of Fraud

A Western District of Texas jury, on Aug. 17, 2011, convicted Kurt Branham Barton, former CEO of Triton Financial LLC, on numerous counts related to a Ponzi scheme.

The government alleged that Barton had, over the course of four years, represented to his investors ' from family members to NFL players ' that he was investing their money even though he actually used the money to pay prior investors or invest in other ventures. As a part
of the scheme, Barton created phony account statements and investments. Ultimately, he defrauded investors out of more than $50 million. Barton was convicted on more than 30 counts.

WASHINGTON, DC

Former NASDAQ Director Sentenced to 42 Months

Donald Johnson was a managing director at NASDAQ's market intelligence desk in New York from 2006 to 2009. As a part of this role he oversaw the desk that provided analysis and information to companies that traded on the NASDAQ exchange and, specifically, provided information to companies regarding trading in their own stock. During those interactions, companies would provide Johnson with material, non-public information.

As a part of his guilty plea to one count of securities fraud, on May 26, 2011, Johnson admitted that he had used this non-public information on at least eight occasions to either purchase or short sell the stock of these companies before they made the information public. Johnson would then reverse his transaction shortly after the information was made public to realize the profits. To hide the transactions, Johnson used an account in his wife's name.

On Aug. 12, 2011, Judge Anthony J. Trenga in the Eastern District of Virginia sentenced Johnson to serve 42 months in prison and ordered him to forfeit $755,066. Johnson is also facing a civil enforcement action filed by the Securities and Exchange Commission (“SEC”) in New York.

Business Crimes Hotline and In the Courts were written by Associate Editor Kenneth S. Clark and Matthew J. Alexander, respectively. Both are associates at Kirkland & Ellis LLP, Washington, DC.