Disaster Recovery Exec Gets Four Years
DALLAS (CN) - A former executive with disaster recovery company Home Solutions of America was sentenced Monday to four years in federal prison for stock fraud.
Brian Marshall, 50, of Tampa, Fla., was sentenced by U.S. District Judge Barbara M.G. Lynn.
Marshall pleaded not guilty to two counts of securities fraud in May 2012, but pleaded guilty in November 2013, on the day his trial was to begin.
He faces up to 25 years in federal prison, restitution and $250,000 in fines for each count.
Marshall was vice president and on the board of directors of New Orleans-based Home Solutions of America, which did new construction and restoration after natural disasters, including hurricanes. He also was president of Fireline Restoration, the company's largest subsidiary, based in Tampa.
Marshall admitted that between December 2006 and Aug. 15, 2007, he lied to investors by fabricating revenue, operating income and costs on several construction contracts in Tampa.
"Marshall caused Fireline to enter into construction contracts with private companies that he wholly or partially owned, including a $4 million contract for the construction of his personal residence," prosecutors said in a statement Monday. "Marshall admitted that he also caused Fireline to record revenue and income from the construction contracts that were false, because little, if any, work had actually been performed."
Marshall caused Home Solutions of America to report the false information to investors in the company's second quarter filings for 2007, prosecutors said.
Former HSA president Frank J. Fradella, 58, of Covington, La., has pleaded guilty to securities fraud in New Orleans Federal Court and is scheduled to be sentenced on Sept. 24.
Fradella was charged in May 2011 with two counts of securities fraud, one count of insider trading, two counts of false certification and one count of making false and misleading statements to auditors and accountants.
Both men were among six people connected with HSA and Fireline that the SEC sued in 2009, alleging the construction of "a fantasyland of fraud."
The SEC claimed Fradella dumped $6.8 million in stock into an inflated market due to the false data being reported to investors.