Former United Rentals President and CFO Sentenced to 27 Months in Prison for Falsifying Company Books

Nora R. Dannehy, United States Attorney for the District of Connecticut, announced that JOHN N. MILNE, 50, of Westport, Connecticut, was sentenced today by Senior United States District Judge Ellen Bree Burns in New Haven to 27 months of imprisonment, followed by three years of supervised release, for conspiring to falsify the books and records of United Rentals, Inc. while he served as its Chief Financial Officer. Judge Burns also ordered MILNE to perform 200 hours of community service. MILNE pleaded guilty to the offense on October 13, 2009.

According to court documents and statements made in court, from December 2002 through his termination in August 2005, MILNE served as the President and Chief Financial Officer of United Rentals, Inc. and its wholly owned subsidiary, United Rentals (North America), Inc. (collectively, “URI”). In 2003, MILNE led a conspiracy to falsify URI’s books and records to hide the true nature of certain payments made to settle obligations incurred as a result of minor sale leaseback (“MSLB”) transactions entered into by URI. Specifically, on approximately December 31, 2002, MILNE executed a contract on behalf of URI with Terex Corporation (“Terex”) relating to URI’s obligations under a remarketing agreement that URI had with Terex. In the contract, URI agreed to make a payment to Terex to cover losses incurred by Terex in connection with one of the MSLBs. In January 2003, URI wired a payment of $8,777,172 to Terex. In March 2003, URI paid Terex $4,030,328 to reconcile amounts owed to Terex on an MSLB with another manufacturer that Terex had acquired. The check requisition for this second payment falsely noted that the payment was for the purchase of equipment.

“We hope that this investigation and prosecution, and the prison term imposed today, will deter corporate executives from falsifying company financial information,” stated U.S. Attorney Dannehy.

In order to resolve a separate civil action brought by the United States Securities and Exchange Commission, (Securities and Exchange Commission v. John N. Milne, 3:08CV505), MILNE has agreed to disgorge $6.25 million.

This matter was investigated by the Federal Bureau of Investigation with the cooperation and assistance of the Securities and Exchange Commission. The case was prosecuted by Assistant United States Attorneys Paul A. Murphy and Michael S. McGarry of the United States Attorney’s Office Securities and Investor Fraud Unit.