Former President of Lexington Company Convicted of All Counts in Multi-Million-Dollar Fraud Scheme
|U.S. Attorney’s Office June 22, 2012|
LEXINGTON—A federal jury convicted the former president of a Lexington-based company today for defrauding thousands of investors nationwide out of more than $18 million.
The jury convicted 66-year-old James Norman Turek of eight counts of securities fraud and five counts of tax fraud following a two-week trial. After the jury returned the guilty verdict, Chief Judge Jennifer B. Coffman found that Turek was a flight risk, and he was taken into custody by the United States Marshals Service.
The evidence at trial showed that Turek headed Plasticon International Inc., a penny stock company. Plasticon made recycled plastic products but had few sales.
According to the evidence, from 2004 to 2006, Turek lured approximately 8,500 investors to purchase Plasticon stock by falsely claiming that Plasticon was profitable when he knew that the company was losing millions of dollars. In statements to investors and in press releases, Turek also falsely claimed that the company owned valuable patents.
The evidence further showed that Turek told investors that he was working for nothing when he was stealing millions of dollars from Plasticon. Turek stole the money by issuing billions of shares of company stock to himself. He claimed on false and backdated documents that he had previously loaned money to the company. In order to execute his scheme, Turek transferred the stock into the names of friends and family members, including his deceased aunt, before selling the stock to unsuspecting investors.
The evidence also revealed that Turek filed false tax returns for the years 2003 through 2007 by failing to report approximately $12 million that he stole from Plasticon.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky; Kathryn M. Keneally, Assistant Attorney General for the Tax Division; Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation; and Christopher A. Henry, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, jointly made the announcement today.
The investigation was conducted by the FBI and the IRS Criminal Investigation Division. The United States was represented at trial by Department of Justice Trial Attorney Kenneth C. Vert and Assistant United States Attorney John Patrick Grant.
Turek is scheduled for sentencing on September 27, 2012. He faces a maximum prison sentence of 20 years on each count of securities fraud and three years on each count of tax fraud. However, the court must consider the U.S. Sentencing Guidelines and the applicable federal statutes before imposing the sentence.