CEO Stung For Securities Fraud
The chief executive officer of RVPlus Inc., a publicly traded microcap company, receives a conviction at trial for orchestrating a multi-million securities fraud scheme using false reports with the U.S. Securities and Exchange Commission (SEC). Former CEO Cary Lee Peterson, of Phoenix, Arizona, is found guilty on all three counts of the indictment. Specifically, the charges include two counts of false certification in SEC filings and one count of securities fraud. The evidence was so compelling that it only took the jury about an hour before returning its verdict.
False SEC Reporting
Peterson’s false reports to the SEC are extensive in nature. For example, Peterson falsely certifies to the SEC that RVPlus enters into a contract worth $1.8 billion. Allegedly, the contract is with the Ministry of Environment for Katsina State within the Federal Republic of Nigeria. The scope of work is to provide unspecified green energy products and services. Yet another example is when Peterson falsely certifies to the SEC that RVPlus enters into a contract worth $90 million. In this instance, the contract is with the Commission of Foreign Affairs to the Senate for the Republic of Haiti. A third illustration of Peterson falsely certifying facts to the SEC is his claim that RVPlus enters into a contract worth $10.5 million with the Federal Ministry of Planning & Economic Affairs for the Republic of Liberia.
Regarding the Haiti and Liberia agreements, Peterson falsely certifies to the SEC that he holds $17,590,837 in short-term accounts receivable. The implications of the false reporting causes the SEC to suspend trading of RVPlus stock. The predicate for the SEC’s decision is based on the inaccuracy of RVPlus’ periodic financial filings. This includes accounts receivable, assets, and operations.
Embellishment Run Wild
Peterson also claims that ECCO2 Corp., a not-for-profit he owns, is an “affiliate organization” of the U.N. Convention on Climate Change. Peterson claims that the “status held with the sectors of the United Nations opens many windows of opportunity to over $100 billion in financial aid to fund ECCO2 projects.” For context, however, it is important to note ECCO2 is not an affiliate of the U.N. Convention on Climate Change. In fact, the U.N. scolds Peterson on two separate occasions demanding that ECCO2 stop claiming it’s affiliation.
With regard to the false certification counts, each charge carries a maximum potential penalty of 10 years in prison and a $1 million fine. The securities fraud count carries a maximum penalty of 20 years in prison and $5 million fine.