Disaster Honcho Faces Securities Charges

     DALLAS (CN) – A former executive with a disaster recovery company pleaded not guilty to securities fraud charges of reporting fictitious revenue to investors, the U.S. Attorney’s Office said.
     Brian Marshall, 48, of Tampa, Fla., appeared Tuesday before U.S. Magistrate Judge Renee Harris Toliver on two charges of securities fraud from an unsealed indictment returned by a federal grand jury in Dallas several weeks ago. If convicted, he faces up to 25 years in federal prison and $250,000 in fines for each count, and restitution.
     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.
     From December 2006 to May 2007, Marshall fabricated false revenue, operating income and costs that were reported to be from Fireline construction projects, the indictment stated. This allegedly resulted in false revenue, cost and income figures to be reported in the company’s SEC reports for the first and second quarters of 2007.
     Prosecutors say Marshall made Fireline enter into construction contracts with several entities in Tampa that he controlled and issued press releases announcing the contracts, but failed to disclose his relationship with the entities and exaggerated the amount of work and revenue.
     “In addition, Marshall caused Fireline to enter into a $4 million contract for the construction of his personal residence on Davis Island,” prosecutors said in a statement. “To support Fireline’s false and fraudulent accounting records, he caused employees of Fireline to create and backdate false and fraudulent contracts and invoices on each of the projects.”
     Marshall remains free on bond.
     Marshall is the second Home Solutions executive to be indicted in Dallas.
     Former CEO and chairman Frank J. Fradella, 56, of Covington, La. 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, according to the U.S. attorney.

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