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Published November 9, 2006 at 5:06 PM
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As our economy has been humming along and corporate America has been rolling along making profits, white-collar scammers are lurking in the same offices trying to skim money off the books. Today's edition of police blotter features a homemaking diva, a two-way con artist, and more. Here's the lowdown on these recent offenders:
- Martha Stewart will pay $5 million on top of a $195,000 fine in August to settle civil insider-trading charges with the SEC, according to a Nov. 8th SEC filing. The payment is related to her conviction in 2004 of four counts of obstructing justice and lying to prosecutors concerning her sale of 3,928 shares of Imclone stock in 2001. The next day after the sale the FDA rejected an Imclone cancer drug causing the stock to fall. Stewart served five months in prison, five months in home confinement in 2004 as part of her sentence, and another five months producing The Apprentice — actually the NBC TV series wasn't part of the punishment, but maybe it should have been.
- On the subject of TV, Michael Lair sounds like a character straight out of an episode of "Law & Order" — except no one has died in this case. The U.S. attorney's office accused the Bozeman, Mont. resident of planning to con lawyers for drug company Biovail and hedge fund SAC Capital. Biovail is suing the hedge fund for allegedly leading a short-selling conspiracy to help collapse the Canadian drug maker's stock price. According to published reports, Bozemen offered both sides information that he promised would help each side in the case. Lair did meet with the law firms of both Biovial and SAC Capital but no information that would have helped either side was given. According to the New York Post, Lair did receive a payment of about $6,000 from Biovail's lawyers for his traveling expenses. SAC Capital's lawyers notified the U.S. attorney's office that Lair posed as an investigator from Biovail's lawyers offering information for $50,000 that would disclose the "illegal and unethical investigative techniques" he used to get information on SAC and its employees.
- SEC sued Edward S. Ehee and funds he managaed, Viper Capital Management and Compass Fund Management, for allegedly stealing about $5 million from 18 investors. Ehee allegedly used the money he raised from investors for gifts to family members, his mortgage and vacations. One example of Ehee's deceit was that he allegedly provided an investor with false information of an account statement showing there was more than $18 million in the Viper Founders Fund and that it had 10% annual returns. The problem was that there had been no funds in those accounts for years, according to the SEC complaint. — Gerald Magpily
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