The Securities and Exchange Commission has charged two former executives of a Maryland company, TVI Corp., and their personal accountant in a fraud scheme involving related-party transactions.

The SEC filed a settled injunctive action in U.S District Court in Maryland on Thursday against TVI’s former president and CEO Richard V. Priddy; former executive vice president Charles L. Sample; and accountant J. Michael Broullire for violating the antifraud and other provisions of the federal securities laws.

The SEC alleged that, from 2003 through 2006, Priddy and Sample, in some instances aided by Broullire, engaged in multiple schemes to defraud TVI and its shareholders. The schemes involved undisclosed related-party transactions and compensation at the Glenn Dale, Md.-based company, which sold emergency response equipment and other products. At the time, TVI was a public company, but the SEC revoked TVI’s securities registration in a settled proceeding in 2009.

According to the SEC’s complaint, in two schemes, Priddy and Sample had Broullire create corporate entities that purchased products from a supplier and then resold the products to TVI at significantly marked-up prices. Priddy also had TVI pay one of the entities a finder’s fee for a corporate acquisition even though the entity did nothing to earn the fee.

The SEC alleged that Priddy, Sample and Broullire had agreed to split the ill-gotten profits from their schemes 42.5 percent, 42.5 percent, and 15 percent, respectively. In another scheme, Priddy increased Sample’s compensation and Sample kicked back a portion of the increased compensation to Priddy in return. Neither Priddy nor Sample disclosed to TVI this arrangement or their actual compensation, and, consequently, TVI did not disclose their accurate compensation in its filings with the Commission or in its proxy statements.

Without admitting or denying the allegations in the Commission’s complaint, the three men have agreed to permanent injunctions from violating various securities laws. Priddy and Sample each also agreed to a permanent officer and director bar. The settlements are subject to court approval.

In a related criminal case, the U.S. Attorney’s Office for the District of Maryland announced the filing of a criminal information charging the defendants with conspiracy to commit wire fraud in connection with the self-dealing scheme. Priddy and Sample each also are charged with filing a false federal income tax return. The offenses carry possible penalties that include imprisonment, fines, and restitution to the company.

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