The former chief accounting officer for home builder Beazer Homes USA has been charged with 11 criminal counts accusing him of conspiracy, securities fraud, obstruction, witness tampering, false statements to a financial institution, misleading conduct, and destruction of records.

Michael T. Rand, 48, of Alpharetta, Ga., appeared Tuesday before a judge in U.S. District Court in Asheville, N.C., and was ordered detained pending a hearing.

The charges arise from an ongoing government investigation involving Beazer and its employees. In July 2009, the company was charged with, among other things, participating in conspiracy and securities fraud with Rand. Beazer accepted responsibility for those charges and, in a deferred prosecution agreement, agreed to pay restitution of up to $50 million.

According to the indictment, Rand allegedly directed an accounting fraud conspiracy to manipulate Beazer’s books and records, deceive Beazer’s auditors, achieve earnings targets, and boost or lower earnings at the home builder. The conspiracy allegedly took place from approximately 2000 to 2007.

The indictment accuses Rand and others of executing the conspiracy in two main ways: First, between 2005 and 2006, Rand allegedly entered into a hidden oral side agreement with another company through one of its employees, which was designed to allow Beazer to obtain cash and recognize revenue from purported “sales” of model homes. This activity was, according to the allegations, in direct contravention of the accounting rules as interpreted by Beazer’s auditors and was hidden from Beazer’s auditors.

Second, between 2000 and 2007, the indictment further alleges, Rand directed and agreed with others to engage in a scheme to commit securities fraud and create false books and records at Beazer by practicing a form of what is commonly known as “cookie jar accounting,” which allowed Rand and others to manipulate Beazer’s publicly reported financial statements.

Rand also allegedly made false statements and reports to Wachovia Bank. Wachovia lent Beazer over $35 million on a so-called “West Morehead Project” in Charlotte. The indictment alleges that in March 2009, Beazer was unable to complete the project and defaulted on the loan, resulting in a loss of over $5 million to Wachovia. In addition, the bank and other lenders provided Beazer with a several-hundred-million-dollar line of credit in which Wachovia relied upon and reviewed Beazer’s financial statements, which Rand and others allegedly manipulated.

Rand also has been accused of obstructing justice by altering, destroying and concealing records with the intent to impede the criminal investigation. He has also been charged with witness tampering and obstruction of an official proceeding of the federal grand jury. If convicted on all charges, he could face over 100 years in prison, although the federal sentencing guidelines are likely to be more lenient.

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