Former Executive of Beverly Company Sentenced to Prison for Securities Fraud
|U.S. Attorney’s Office February 26, 2013|
BOSTON—The former CFO of Locateplus Holdings Corporation was sentenced yesterday for his role in a number of fraudulent schemes which artificially inflated his company’s assets and revenues.
James C. Fields, 45, of Brookline, was sentenced by U.S. District Judge Douglas P. Woodlock to five years in prison, followed by three years of supervised release, and was ordered to pay restitution to his victims. In November 2012, Fields was convicted by a jury, after a three-week trial, for conspiracy, securities fraud, false statements to company auditors, false statements in required SEC filings, wrongful certifications of SEC filings, aggravated identity theft, and money laundering.
Beginning in about 2002, Fields, the former chief financial officer of Locateplus Holdings Corporation and later acting chief executive officer, pursued several fraudulent schemes intended to artificially inflate Locateplus’ assets and revenues. Locateplus was a publicly traded company based in Beverly, Massachusetts, that sold access to personal data and other information. Working with Jon Latorella, the former CEO of the company, Fields engaged in a series of fraudulent activities, including:
- Creating a fake company called Andover Secure Resources, using the identity of a deceased man as the head of Andover, and then fabricating a loan transaction between Andover and Locateplus under which Andover supposedly borrowed over $1 million from Locateplus at a favorable interest rate;
- Creating another fake company called Omni Data Services and opening bank accounts and a post office box in its name and then falsifying revenue streams to make it look like Omni Data was paying Locateplus millions of dollars under the terms of a fake contract;
- Deceiving the SEC and other regulatory authorities to avoid registering securities being sold by a company called Paradigm Tactical Products, including fabricating Paradigm investors using the identities of Fields’ acquaintances, girlfriend, skydiving instructors, and two deceased men; and
- Routinely deceiving Locateplus’ independent accountants and the SEC about the nature of Locateplus’s revenues and assets in order to keep these fraudulent schemes going and to attract investment in Locateplus.
In March 2012, Latorella pleaded guilty and was sentenced in June 2012 to five years in prison, followed by three years of supervised release.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, made the announcement today. The U.S. Attorney’s Office also acknowledges the valuable assistance it received from the Boston Office of the U.S. Securities and Exchange Commission.
The case was prosecuted by Assistant U.S. Attorneys Andrew E. Lelling and Paul G. Levenson of Ortiz’s Economic Crimes Unit.