The Securities and Exchange Commission said the U.S. District Court for the District of Minnesota has entered final judgments against the former CFO and controller of Buca Inc., the corporate parent of the Buca di Beppo restaurant chain.
The SEC filed a complaint in June 2006 against former Buca CFO Greg Gadel and former controller Daniel Skrypek. The complaint alleged that Buca’s public filings materially understated the executive compensation received by Gadel by $96,630, as well as the compensation received by the company’s former CEO, by $849,100. Gadel’s undisclosed compensation allegedly included reimbursements for family vacations and visits to strip clubs, according to the SEC.
The complaint alleged that Gadel and Skypek knew about and failed to disclose related-party transactions totaling more than $1 million between Buca and an information technology company of which Gadel was a director and shareholder, and a related-party transaction in which Buca’s former CEO used company funds to buy an Italian villa in his and his wife’s names.
Buca allegedly inflated its income by nearly $12 million between 2000 and 2004 by improperly capitalizing numerous expenses, allowing the company to overstate its annual income by 18.8 to 36.9 percent. The final judgments enjoin the two former executives from violating various laws and bar them from serving as officers or directors of public companies. Skrypek was also ordered to pay a $50,000 penalty.
Earlier last year, Gadel was sentenced to a year and a day in jail, fined $50,000, and ordered to repay Buca $76,180, according to the St. Paul Pioneer Press, while Skrypek was sentenced to 150 hours of community service. Former CEO Joseph Micatrotto Sr. paid a $500,000 civil fine to the SEC, repaid $65,000 to the company, was sentenced to 13 months in jail, and was fined another $250,000.
