Former Computer Company CEO Fined $5 Million and Sentenced to Two Years in Prison for Conspiracy, Securities Fraud, Money Laundering
|U.S. Attorney’s Office June 04, 2013|
CINCINNATI—Michael E. Peppel, 46, former chief executive officer of MCSi Inc., a computer sales company formerly headquartered in Dayton, was sentenced in U.S. District Court here today to two years in prison, followed by three years of court supervision, for engaging in a deliberate scheme to defraud millions of dollars from company investors by improperly reporting company revenues. He was also fined $5 million.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Division (FBI); Kathy Enstrom, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS); and Christopher T. White, Assistant Inspector in Charge, Cincinnati Field Office, U.S. Postal Inspection Service, announced the sentence handed down today by Senior U.S. District Judge Sandra S. Beckwith.
Peppel pleaded guilty in August 2010 to one count each of conspiracy, securities fraud, and money laundering.
Peppel falsified company accounting records and financial statements to mislead investors about the company’s dire financial situation. “Through his calculated conduct, Mr. Peppel undermined the core principle upon which American equity markets and investors rely—the need for complete, accurate, and truthful information,” Assistant U.S. Attorneys Dwight Keller and Brent Tabacchi wrote in a filing with the court prior to sentencing.
Peppel was ordered to forfeit three pieces of real property, the contents of bank and investment accounts, a $20,000 Italian oil painting, and a $9,000 Italian bronze sculpture that represent the proceeds traceable to the crimes.
MCSi called itself North America’s premier reseller of advanced integrated computer technology and visual communications products for business, government and educational institutions. MCSi was formerly listed on the NASDAQ stock market, until it was delisted in April 2003. In 2001, the firm’s annual sales exceeded $810 million, it maintained offices at 160 locations, had 50,000 clients, and had over 1,300 employees. In 2003, it filed for bankruptcy.
Stewart commended the efforts of the agents and investigators of the IRS, U.S. Postal Inspection Service, and FBI for their in-depth investigation into this matter and Assistant U.S. Attorneys Dwight Keller and Brent Tabacchi, who represented the United States in the case.