Exec Accused of Fooling SEC Vindicated by Jury
KANSAS CITY, Kan. (CN) - A federal jury cleared a chief financial officer on charges that he filed false paperwork with the Securities and Exchange Commission.
In a 2011 complaint against various NIC officials, the SEC claimed that CFO Stephen Kovzan filed several false and misleading documents that failed to properly report the income of NIC's former CEO, Jeffrey Fraser, between 2002 and 2006.
Fraser received more than $1.18 million in unreported income at that time, including payments for two homes, vacations, hunting expenses, flight training, clothing, spa treatments, computers, a car and the cost of Fraser commuting by plane from his Wyoming home to NIC's headquarters in Kansas City, according to the lawsuit.
The trial stretched nearly three weeks, but a federal jury ruled for Kovzan on all 12 counts Monday.
As part of his defense, Kovzan's attorneys filed an email Kovzan wrote on May 1, 2006, expressing concerns about Fraser's deductions and a "feeling of helplessness" in NIC's finance department over Fraser's conduct, the Kansas City Business Journal reported.
U.S. District Judge John Lungstrum entered judgment for Kovzan on Tuesday.
Kovzan's attorneys at Dentons and WilmerHale applauded the ruling.
They noted the legal team was led by Dentons partner Stephen Hill Jr. and WilmerHale partner Andrew Weissman. Dentons partners Maxwell Carr-Howard and Angela Harse also worked on the case alongside associate Sara Holzschuh and WillmerHale partners John Valentine and Nicole Rabner and counsel Kelly Shoop and David Zetlin-Jones.
NIC describes itself as "the nation's leading provider of official government portals, online services, and secure payment processing solutions."
The SEC filed two separate lawsuits related to NIC in 2011. One was against Kovzan. The other - against NIC, Fraser, NIC former CFO Eric Bur and former COO Harry Harrington - was settled for $2.8 million in January 2011, according to the Kansas City Business Journal.