Monday, April 7, 2008

More on the Team Communications Fraud Case

Guest Blogger - Professor J. Kelly Strader writes -

As previously reported here and in the Los Angeles Times (here), the U.S. Attorney’s Office in Los Angeles recently announced the indictment of Drew Levin, the founder and former President and CEO of Team Communications Group, a television production and distribution company. Levin’s alleged co-conspirator has pleaded guilty and is scheduled to be sentenced in January 2009, according to the government’s press release (here). One Hollywood blog (here) juicily reports on Levin, an Emmy-winning producer.

The indictment (see below) reads like a classic Enron-era scheme to cook the books to inflate stock prices. In short, Levin allegedly conspired to create sales of phony license and fee agreements to bolster Team’s reported income. The indictment describes a scheme that lasted from June 1999 to February 2001, when the fraud was revealed and Levin resigned. Team filed for bankruptcy in June 2002. The SEC filed a civil suit in 2005. The delay in filing the indictment presumably created some serious statute of limitations issues for the government.

The 13-count indictment charges conspiracy, three counts of maintaining false books and records, ten counts based on false filings with the SEC, two counts of making false statements during sworn testimony before the SEC, and obstruction of an agency proceeding. It is interesting to note what the indictment does not contain – perjury charges (instead of the false statements charges) based on the SEC testimony, or mail and wire fraud charges.

Indictment - Download team_comm_stock_fraud_indictment.pdf

(jks)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2008/04/more-on-the-tea.html

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