Former President of International Outdoor Advertising Company Sentenced in Manhattan Federal Court to Four Months in Prison for Orchestrating $19.75 Million Accounting Fraud Scheme
|U.S. Attorney’s Office January 03, 2013|
Preet Bharara, the United States Attorney for the Southern District of New York, announced that Todd Hansen, the former president of the United States division of an international outdoor advertising company (the “company”), was sentenced today in Manhattan federal court to four months in prison in connection with his participation in a five-year, $19.75 million accounting fraud scheme designed to make it appear that the company was meeting certain performance targets so that he could receive higher salary increases and bonuses. Hansen pled guilty in June 2012 to one count of conspiracy to commit wire fraud and one substantive count of wire fraud. He was sentenced by U.S. District Judge Jed S. Rakoff.
According to the complaint and the indictment filed in Manhattan federal court:
From 2004 until 2009, Hansen served as president of the company, a wholly owned subsidiary of a United Kingdom corporation, with its common stock listed on the London Stock Exchange. Hansen, together with Finance Director James Buckley, directed the company’s controller (the “controller”) to make fictitious accounting entries in the company’s books and records in order to give the appearance that the company was meeting its monthly performance targets. To create these inflated income figures, Hansen directed the controller to record higher monthly revenues from either false client billings or rebates on certain goods and services that the company was purportedly receiving from some of its vendors.
The false accounting entries resulted in the preparation of financial statements that reflected artificially inflated monthly income amounts for the company. Hansen was thereby able to create the misimpression that the company was meeting its projected financial performance goals. During this five-year period, the fraudulent entries Hansen requested resulted in a total overstatement of the company’s net income by approximately $19.75 million. As a result of meeting these fictitious performance goals, Hansen was paid approximately $1.1 million in salaries and bonuses over the five-year period.
In addition to the accounting fraud scheme, during this same time period, Hansen misused tens of thousands of dollars of company funds to pay for expenses and fees that directly benefitted him, his family, and friends and that were unrelated to the Company’s legitimate business.
In addition to the prison term, Judge Rakoff sentenced Hansen, 49, of Bakersfield, California, to three years of supervised release. Hansen was also ordered to pay $231,000 in restitution and forfeit $173,450.90.
James Buckley, 49, of Westwood, New Jersey, was sentenced by Judge Rakoff on October 16, 2012, to time served, followed by one year of supervised release, and ordered to pay $26,872.22 in restitution.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Christopher D. Frey and Nicole Friedlander are in charge of the prosecution.