Federal Criminal Defense Blog : Georgia Federal Criminal Defense Lawyer & Attorney : Gillen Withers & Lake Law Firm : White Collar Crime, RICO, Trial : Atlanta, Savannah, GA

A Judge in Oshawa, Ontario, a suburb of Toronto, acquitted six former executive of Royal Group Technologies on Friday, according to the Toronto Star. Royal Group is a manufacturer of plastic materials for the housing construction industry. The company is a subsidiary of Georgia Gulf Corporation, an Atlanta-based, manufacturer and marketer of chlorovinyls and aromatics, which purchased Royal Group in 2006 for $1.7 billion.

The executives, including Royal Group's founder, Vic De Zen, president Doug Dunsmuir, former chief financial officers Ron Goegan and Gary Brown, ex vice-president Luciano (Lu) Galasso and accounting director Gordon Brocklehurst, were charged with fraud in 2006 relating to a purchase of a property in Vaughan, Ontario, in 1998 for $20.5 million by a company tied to the defendants, which was then re-sold on the same day to Royal Group for $27.4 million. The defendants were also charged over their receipt of more than $2 million in bonuses for the sale of a subsidiary of Royal Group in 2002. The defendants were charged following an investigation by the Royal Canadian Mounted Police's Market Enforcement Team, designed to combat white collar crime.

The defendants' counsel argued that the defendants satisfied all disclosure requirements, and that the bonuses appeared in Royal Group's annual circular. Mr. Justice Richard Blouin acquitted the defendants immediately after hearing final oral arguments. The trial ran a total of 49 days, beginning last April. Canada's Federal Public Prosecution Service will determine whether or not to appeal the Judge's decision.

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As reported by Law.com, New York-based Comverse Technology, Inc., the worlds largest manufacturer of voice mail software, has entered into a $225 million settlement in a class action brought against it stemming from a backdating scandal. William Sorin, Comverse's former general counsel, and Comverse's former CEO, Jacob "Kobi" Alexander, were charged by the SEC and Federal prosecutors in 2006 with fraudulenty changing the grant dates of stock option awards from 1998 to 2000. In all, Sorin realized $14 million in profits from stock options, approximately $1 million of which was due to backdating. Sorin pled guilty in the U.S. District Court for the Eastern District of New York to conspiracy to commit securities fraud, mail fraud and wire fraud in 2006, and has already served his sentence of a year and a day in prison. Alexander an Israeli citizen, fled to Namibia to avoid prosecution.

Plaintiffs brought a derivative actions against Comverse in New York Federal and State courts based on the backdating. Alexander has agreed to pay $60 million and Sorin has agreed to pay $1 million to fund the settlement. In exchange, Comverse will drop its lawsuit against the former executives, who will also drop their counterclaims against the company.  The company earlier settled claims relating to the improper backdating and other accounting problems with federal regulators.

Sorin had previously entered into a settlement with the SEC, agreeing to pay $3 million in fines. However, his attorneys have asked the Court to vacate the SEC settlement and judgment, claiming that Federal prosecutors violated promises they made as part of his plea deal. Sorin claims that prosectors agreed not to object to his request to avoid jail time when he agreed to plead guilty to criminal charges and pay the SEC $3 million to settle civil charges, however he alleges that the government reneged on its promise and opposed his request at sentencing.

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