Saturday, July 23, 2005
Patrick Quinlan, who was CEO of MCA Financial Corp., which invested in Detroit-area real estate and financed it operations by selling securities, received a ten year prison sentence after pleading guilty two years ago to conspiracy to commit mail, wire and securities fraud. The company collapsed in 1999, triggering losses to investors of over $265 million that made it the largest securities fraud in Michigan history. The sentence was the maximum allowable under the statute; at the time of the offenses, the fraud statutes (which would control the sentence for conspiracy in this case) had a ten year maximum, which was increased to thirty years by the Sarbanes-Oxley Act. Although Quinlan apologized to investors, U.S. District Court Judge Nancy Edmunds found that he had not accepted responsibility by still blaming other executives and MCA's accountants for the fraud. According to a Detroit Free Press article (here), Judge Edmunds stated that Quinlan was "the dominant force at MCA, the architect of the fraud and the most culpable person in the scheme to defraud." (ph -- in the interest of full disclosure, I consulted on a malpractice lawsuit against the company's outside law firm, which was dismissed on summary judgment).