Five corporate fraud convictions dropped

This entry was posted on Tuesday, August 9th, 2011 at 6:11 pm

Five high profile corporate fraud convictions have been thrown out by the US Federal Appeal court, striking a blow to the Justice Department. Following one of the biggest corporate accounting scandals in recent history, five former insurance executives had all been convicted for their alleged involvement in fraudulently manipulating the financial figures for insurance firm AIG.

However, at an appeal hearing a panel has said that the judge in the original hearing had prejudiced the corporate fraud case. By allowing the jury to be presented evidence about the fluctuations in AIG?s stock value at the time of the accusations, the judge was found to have prejudiced the case unfairly. The accused, who were all facing prison terms of between one and four years, have all had their convictions overturned.

In the UK, a financial advisor has been jailed for serious fraud offences. James McPhail was convicted for conning his elderly clients into giving him almost half a million pounds. He was sentenced to a minimum of five years.

Many of the serious fraud victims were duped into making out cheques to him in the false promise that he would invest the funds on their behalf. Instead, McPhail used the fraudulently obtained funds to support another company he owned which was in financial difficulties.

One of the serious fraud victims was a woman in her seventies who made out three blank cheques, enabling McPhail to steal £125,000 from her. Some of McPhail?s clients contacted Surrey Police with their concerns in October last year and following an investigation, he was charged with five counts of serious fraud in May. He admitted all five charges and was sentenced to six and a half years imprisonment.