New York (April 27, 2004) -- A Manhattan jury found C. Gregory Earls, the chairman and chief executive of U.S. Technologies Inc., guilty on all 22 counts in his securities fraud trial in federal court here, according to published reports.
Earls, 59, was reportedly convicted of one count of securities fraud, two counts of mail fraud and 19 counts of wire fraud in connection with two scams to steal nearly $15 million. He faces up to 10 years in prison on the securities fraud and five years in prison for each count of mail and wire fraud. His sentencing is scheduled for Aug. 3.
In November 2002, U.S. Technologies' accounting woes forced former Federal Bureau of Investigation director William Webster to resign as head of the Public Company Accounting Oversight Board after less than three weeks on the job, after it was revealed that he headed the audit committee of the company, which was under investigation for fraud.
Former Securities and Exchange Commission chair Harvey Pitt and SEC chief accountant Robert Herdman also resigned following the controversy, after it was discovered that Webster had informed them about his stint on the board, but they didn't inform the other SEC commissioners about Webster’s admission prior to the vote on his appointment.
According to reports, prosecutors charged that Earls convinced more than 100 investors to invest more than $20 million in USV Partners LLC, a limited company he created, in exchange for preferred stock and warrants from U.S. Technologies, but purchased only a portion of the stock he promised investors, and used some of the money to start an education trust for his children and to repay investors in other business ventures he organized. The government also said Earls, who once served as the manager for financing for Fresh Direct Inc., defrauded the online grocer out of $1.3 million.
-- WebCPA staff
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