Post by TexasPride on Jun 10, 2013 21:49:04 GMT -6
Rufus Paul Harris (aka Paul Rufus Harris), former CEO of Conversion Solutions Holdings, Inc., received 23 years in prison after a bizarre trial in Atlanta federal court. Harris’ court appointed lawyer, Howard Manchel, did what he could for his client but Harris was not the best client. Manchel noted in a motion to the court to show leniency on Harris during sentencing, because he, “has had a difficult relationship with Mr. Harris and submits this argument without his client’s backing but with the singular purpose of hoping to convince the Court to extend mercy to Mr. Harris and his family.” Manchel had recommended Harris serve 6 years in prison….that didn’t happen.
The Securities and Exchange Commission (SEC) first got involved with this case in September 2006 when Conversion (traded on the OTCBB under the symbol CHSB) issued a press release and filed a Form 8-K disclosure statement announcing that it had added “5 Billion Euro denominated Global Bonds issued by the Republic of Venezuela” to its existing portfolio. The Company went so far as to provide international identification numbers for the bonds. The SEC looked into it and determined that the statements were false but that did not stop the company from issuing another press release on September 27th stating the same claim.
According to the SEC complaint, Conversion Solutions’ fraudulent activities were not limited to false claims about Venezuelan bonds. On September 27, 2006, the Company issued a press release announcing the finalization of contracts with “Deutsche Bank ABN, Amro Bank, Dresdner Bank and Commerce Bank” which would be the “foundation” of the Company’s “projected funding platform.” These statements also were false but they sure did help drive up the stock price.
On September 26th, Conversion Solutions stock closed at $1.01 a share, on volume of 498,303 shares. On September 27th, after the press releases and public filings had circulated, the Company’s stock closed at $1.75 a share. Volume that day was 4,932,180, a nearly 10 fold increase. Then word hit the street and the effect was even more dramatic on September 28th. That day, Conversion Solutions stock traded over 14 million shares and closed at $3.02 a share, which was well below a prediction by Harris during the scam who claimed, “We are looking at a new justifiable reorganization release price of $25.63 [per share].” In reality, Conversion Solutions had no assets to warrant a price of even a penny. Harris took the opportunity to transfer some stock to family members and sold the inflated shares on the open market.
At the center of all of this was Rufus Paul Harris (43 of Adairsville, GA), Benjamin Stanley (48 of Kennesaw, GA and chief operating officer) and Darryl Horton (50 of Okemos, MI and chief financial officer). All three men were on trial in May 2011 when Harris decided to fire his attorney on the opening day of the proceedings and chose to represent himself. Harris did not stick around long, within a few days of the trial he had heard enough and skipped town…a fugitive. Harris did not remain on the lam for long. He was caught in southern Utah eight days after he went on the run without incident and the government gave him a free ride back to Atlanta to face the District judge Timothy Batten. Rufus PaulHarris has remained in custody ever since … and will be behind bars for years to come.
Horton had previously pled guilty to federal tax charges in March 2010 and was also employed by the Michigan Department of Community Health. He eventually pled guilty to other charges while the jury was deliberating. Horton was sentenced to 54 months in prison. In the end, Benjamin Stanley was the only defendant remaining in the courtroom when the guilty verdict came down. Must have been a lonely feeling. Stanley got 16 years in prison.
The PCAOB (Public Company Accounting Oversight Board), responsible for auditing firms that audit public companies, also got involved in this case in 2007 by bringing sanctions against the firm/person that audited Conversion’s books. It seems Horton had convinced an internal auditor at the Michigan Department of Community Health, Thomas Benson(52), to sign off on the audit of Conversion’s books for the year 2006 when all the mad-trading went down. Benson, a CPA at the time, cooperated with authorities and was a witness for the prosecution.
www.forbes.com/sites/walterpavlo/2012/02/23/conversion-solutions-holdings-ceo-gets-23-years-in-prison/
www.justice.gov/usao/gan/press/2012/02-23-12.html
The Securities and Exchange Commission (SEC) first got involved with this case in September 2006 when Conversion (traded on the OTCBB under the symbol CHSB) issued a press release and filed a Form 8-K disclosure statement announcing that it had added “5 Billion Euro denominated Global Bonds issued by the Republic of Venezuela” to its existing portfolio. The Company went so far as to provide international identification numbers for the bonds. The SEC looked into it and determined that the statements were false but that did not stop the company from issuing another press release on September 27th stating the same claim.
According to the SEC complaint, Conversion Solutions’ fraudulent activities were not limited to false claims about Venezuelan bonds. On September 27, 2006, the Company issued a press release announcing the finalization of contracts with “Deutsche Bank ABN, Amro Bank, Dresdner Bank and Commerce Bank” which would be the “foundation” of the Company’s “projected funding platform.” These statements also were false but they sure did help drive up the stock price.
On September 26th, Conversion Solutions stock closed at $1.01 a share, on volume of 498,303 shares. On September 27th, after the press releases and public filings had circulated, the Company’s stock closed at $1.75 a share. Volume that day was 4,932,180, a nearly 10 fold increase. Then word hit the street and the effect was even more dramatic on September 28th. That day, Conversion Solutions stock traded over 14 million shares and closed at $3.02 a share, which was well below a prediction by Harris during the scam who claimed, “We are looking at a new justifiable reorganization release price of $25.63 [per share].” In reality, Conversion Solutions had no assets to warrant a price of even a penny. Harris took the opportunity to transfer some stock to family members and sold the inflated shares on the open market.
At the center of all of this was Rufus Paul Harris (43 of Adairsville, GA), Benjamin Stanley (48 of Kennesaw, GA and chief operating officer) and Darryl Horton (50 of Okemos, MI and chief financial officer). All three men were on trial in May 2011 when Harris decided to fire his attorney on the opening day of the proceedings and chose to represent himself. Harris did not stick around long, within a few days of the trial he had heard enough and skipped town…a fugitive. Harris did not remain on the lam for long. He was caught in southern Utah eight days after he went on the run without incident and the government gave him a free ride back to Atlanta to face the District judge Timothy Batten. Rufus PaulHarris has remained in custody ever since … and will be behind bars for years to come.
Horton had previously pled guilty to federal tax charges in March 2010 and was also employed by the Michigan Department of Community Health. He eventually pled guilty to other charges while the jury was deliberating. Horton was sentenced to 54 months in prison. In the end, Benjamin Stanley was the only defendant remaining in the courtroom when the guilty verdict came down. Must have been a lonely feeling. Stanley got 16 years in prison.
The PCAOB (Public Company Accounting Oversight Board), responsible for auditing firms that audit public companies, also got involved in this case in 2007 by bringing sanctions against the firm/person that audited Conversion’s books. It seems Horton had convinced an internal auditor at the Michigan Department of Community Health, Thomas Benson(52), to sign off on the audit of Conversion’s books for the year 2006 when all the mad-trading went down. Benson, a CPA at the time, cooperated with authorities and was a witness for the prosecution.
www.forbes.com/sites/walterpavlo/2012/02/23/conversion-solutions-holdings-ceo-gets-23-years-in-prison/
www.justice.gov/usao/gan/press/2012/02-23-12.html
