The former CFO of GlobeTel Communications has pled to tax-evasion charges, federal regulators have announced.
Thomas Jimenez was charged earlier this month on a single count of obstructing and impeding the due administration of the tax laws. According to regulators, he was responsible for preparing and filing tax forms whenever the telecommunications company’s corporate officers received corporate stock as compensation. But, it was charged, he failed to report to the Internal Revenue Service nearly $2.8 million in stock compensation paid to him and other corporate officers in 2004 and 2005.
Jimenez allegedly used a nominee entity, C&M Management Consulting, to make loans to the GlobeTel corporate officers. These loans were to be secured by the corporate officers’ GlobeTel stock. Rather than holding the stock as collateral for the loans, however, C&M sold the stock and distributed the proceeds from the sale to the corporate officers, according to the government.
As part of his plea, Jimenez admitted that he knew the stock serving as collateral for the purported loans would be sold and the proceeds distributed to GlobeTel’s corporate officers. He faces a total of three years in prison, followed by one year of supervised release, and a fine of up to $5,000. A sentencing date has not yet been set.
Jimenez is already facing civil charges from government regulators. Last May the Securities and Exchange Commission filed a civil action against GlobeTel and three former officers, including Jimenez, in connection with an alleged scheme to inflate the company’s revenue and hide millions of dollars of unpaid receivables and liabilities between 2004 and 2006. Jimenez was the only one not to settle those charges at the time. The SEC alleged that GlobeTel recorded $119 million in revenue on the basis of fraudulent invoices created by two people in charge of its wholesale telecommunications business.
Jimenez and another former CFO, Lawrence Lynch, were accused of making, or causing to be made, entries on GlobeTel’s general ledger that improperly offset the receivables associated with those revenues against the liabilities, thereby concealing the revenue fraud from investors. Former CEO Timothy Huff was alleged to have caused GlobeTel to sell $1.6 million worth of its common stock in 2005 in violation of the registration provisions of the federal securities laws.
In his settlement, Lynch agreed to a five-year officer and director bar and to pay a civil penalty in an amount to be determined by the court. Huff agreed to pay a $30,000 civil penalty. In the settlement, neither man admitted to or denied guilt.