The Securities and Exchange Commission on Tuesday said it had filed charges against four Chinese executives, a U.S. officer and the audit committee chair of AgFeed Industries, which had its headquarters in Hendersonville before quickly relocating to Colorado in late 2011. In a statement, SEC officials said the execs of the animal feed company inflated revenues and hid their correct set of financials from auditors. The director being charged is merchant banker Ivan Gothner, whom regulators say had a chance to fix things.
He sought advice from a former director and company advisor who responded in e-mail communications that there was “not just smoke but fire” and recommended that AgFeed hire professional investigators guided by outside legal counsel. However, Gothner ignored the recommendation and internalized the situation while false financial reporting continued.
Two locals have been indicted — along with two former business partners — on various charges of conspiracy, fraud and embezzlement related to Smart Data Solutions, a venture that marketed itself as a health insurer. But SDS wasn't properly licensed anywhere and Bart and Angela Posey are now facing a 57-page indictment.
According to the indictment, the company accepted more than $28 million in health care coverage premiums but denied and rejected legitimate claims. More than $5.4 million of the money was diverted for the defendants’ personal use, the indictment claims.
SEE ALSO: Our past coverage of Smart Data
Fewer than nine months after uncovering the $215 million Peregrine Financial Group fraud, Confirmation.com's electronic audit confirmation service was used to uncover the financial fraud committed by hedge fund owner and operator James A. Shepherd.
Shepherd recently pled guilty to stealing millions of dollars from more than 100 investors over a seven-year period. Read more here.
"The Shepherd fraud is almost identical to the Russell Wasendorf PFGBest fraud," Chris Schellhorn (pictured), Confirmation.com CEO said in a release (read more here). "Just like Wasendorf's 20-year fraud, for over seven years Shepherd used readily available software tools to create fake bank statements, he directed the auditors to send bank confirmation letters to a PO Box he had rented, forged a fictitious bank employee's signature, and he sent the fraudulent audit confirmations back to the auditor."
Confirmation.com is based in Brentwood.
- BRASWELL, ROBERT
- GARRETT, JOHNNY C EXECUTOR; GARRETT, JOHNNY C IV EXECUTOR; GARRETT, ANN BIGGER ESTATE; GARRETT, TIMOTHY M EXECUTOR
- GARRETT, TIMOTHY M EXECUTOR; GARRETT, ANN BIGGER ESTATE; GARRETT, JOHNNY C EXECUTOR; GARRETT, JOHNNY C IV EXECUTOR
- GARRETT, JOHNNY C IV EXECUTOR; GARRETT, JOHNNY C EXECUTOR; GARRETT, ANN BIGGER ESTATE; GARRETT, TIMOTHY M EXECUTOR