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Finance chief helped Network Technologies Group swindled millions of dollars from its lender.
Stephen Taub, CFO.com | US
May 27, 2004
The former chief financial officer of a defunct Baltimore-based telecommunications company was sentenced to a year in prison for his role in an accounting fraud that helped destroy the company, according to the Baltimore Sun.
In February 2003, Thomas Bray pleaded guilty to wire fraud stemming from a scheme in which Network Technologies Group swindled millions of dollars from its lender, Mercantile-Safe Deposit and Trust Co., and two investors, according to the paper.
U.S. District Judge J. Frederick Motz, noted that Bray took responsibility for his actions and cooperated with prosecutors. However, the judge said that the crime, "for all the reasons I could pontificate on, has to carry a prison sentence," according to the paper.
Bray's lawyer, Gerald Ruter, told the Sun that his client did not orchestrate the fraud, but that he also did not expose the irregularities when he found them. "This was a crime of omission," Ruter insisted.
Bray apologized to the judge, after stating that he had believed he could fix the company's accounting problems, according to the report. "To this day, when I think about the people, the loss involved, I just can't put into words how this affects me," he reportedly said.
About 125 workers lost their jobs when NTG closed its offices in the summer of 2002, reported the Sun.
Bray — who was ordered to pay $980,000 in restitution, in addition to serving his prison time — is the third NTG executive to be sentenced in this case.
Last month, former chief executive officer Michele Tobin was sentenced to nine years in prison and ordered to repay $3.5 million to the bank and investment companies. Beverly Baker, NTG's comptroller, was sentenced to two years in prison, according to the Sun.
Prosecutors claimed that the company falsified financial statements and failed to record all of its expenses, noted the Sun.. Those actions helped NTG to appear almost $2 million more profitable than it was, enabling it to solicit investments and draw on credit lines, added the paper.