Fraud roundup

It can be hard to track all the ways people can run afoul of finance laws and regulations. CFO Brew has gathered recent notable convictions, indictments, and plea deals.

Expensive tastes. Christopher Scott Harrison, CFO and majority shareholder of North Carolina-based insurance and benefits provider Ebenconcepts, was sentenced to 18 months in prison and ordered to pay restitution of $4.6+ million after pleading guilty to tax fraud for filing spurious expense claims to pay himself about $25 million in income he didn’t report to the IRS.

Harrison engaged in a scheme to “knowingly divert corporate proceeds to support his lifestyle by claiming fancy jewelry, such as a Rolex watch, a Cartier diamond necklace and a Tiffany bracelet were business expenses,” according to the US Attorney’s office prosecutors.

Harrison’s fraud unraveled when he filed for personal bankruptcy. The Bankruptcy Trustee hired an accounting firm which “discovered almost $25 million in personal expenditures” miscategorized as business expenses, and that he had filed false returns “leading to almost $6 million in uncollected federal income taxes.”

Peek-a-boo. Jordan Meadow,a registered stockbroker, has been charged with insider trading by the SEC. Meadow allegedly had access to nonpublic information from Steven Teixeira, CCO of a payments firm who has also been charged by the SEC.

Prosecutors allege that Teixeira accessed confidential information on his girlfriend’s laptop when she was an executive assistant at an investment bank that was advising firms involved in mergers and acquisitions.

The DOJ says that Meadow, his clients, and a colleague, made more than $5 million from advance knowledge of Penn National Gaming’s $2.2 billion purchase of Score Media and Gaming in 2021, as well as more than $100,000 from information about a planned purchase of software company VMWare in 2022. Teixeira has pleaded guilty while agreeing to cooperate with prosecutors.

Inside knowledge on the Trump SPAC? The SEC charged Bruce Garelick, a SPAC director, with insider trading alongside two alleged co-conspirators. According to prosecutors, upon joining the board of a SPAC called DWAC, Garelick allegedly learned about DWAC’s plan to merge with Trump Media & Technology Group and passed that information to others, and they “collectively realized illicit profits of more than $22.9 million.”

Inside job? The SEC filedinsider trading charges against Joseph Dupont and four others, alleging thatDupont, vice president at Alexion Pharmaceuticals, told a friend, Shawn Cronin, that his firm planned to purchase Portola Pharmaceuticals.

Cronin is alleged to have told others, who the SEC says went on to trade Portola stock, “reaping millions of dollars of illegally obtained trading profits.” Cronin is chief of police of Dighton, Massachusetts, where Dupont was a reserve officer. Cronin has been placed on administrative leave and is among those charged by the SEC.