The senior executive of formerly Beverly-based Locateplus was convicted of conspiracy, securities fraud and aggravated identity theft on Monday.
45-year-old James Fields, of Boston, was convicted by a jury sitting before United States District Judge Douglas P. Woodlock of conspiracy; securities fraud; false statements to company auditors; false statements in required SEC filings; wrongful certifications of SEC filings; aggravated identity theft; and money laundering.
Fields faces up to five years in prison on the charge of conspiracy; up to 20 years in prison on the charge of securities fraud and on each of the multiple charges of making false statements to auditors and to the SEC; up to 10 years in prison on multiple charges of wrongful certifications of SEC filings; a two year
mandatory minimum sentence on the charge of aggravated identity theft; and up to 10 years in prison for money laundering; to be followed by three years of supervised release and a fine of up to $5 million, according to a release from U.S. Attorney Carmen Ortiz's office.
According to Ortiz's office, in about 2003, Fields, the former acting Chief Financial Officer of Locateplus Holdings Corporation (Locateplus), and later acting Chief Executive Officer (CEO) at Locateplus, engaged in several fraudulent schemes intended to artificially enhance Locateplus’s stated financial condition and thereby to deceive the investing public.
Locateplus was a publicly- traded company, based in Beverly, that sold access to personal data and other information.
According to the Ortiz's office, Fields, alongside former CEO Jon Latorella, engaged in a series of fraudulent activities, including:
- Manipulating funds to make it appear that an outside entity, called “Andover Secure Resources,” was repaying Locateplus under the terms of a loan agreement, when in fact Andover was fake, the debt was fake, and the money came from Locateplus itself and other sources;
- Fabricating another entity, called “Omni Data Services,” as a supposed major customer of Locateplus, issuing multiple press releases in October and November 2004 announcing a fake contract with Omni Data; and manipulating funds to make it appear that Omni Data was paying Locateplus under the terms of the fake deal;
- Deceiving Locateplus’s independent accountants into believing that Andover and Omni Data were real, after which Fields presented the fake assets and revenue attributable to those fake entities in Locateplus’s SEC filings and certified that those filings were correct;
- Filing fraudulent paperwork with the SEC as part of a scheme to avoid having to register securities being sold by Paradigm Tactical Products, another company Latorella and Fields helped set up and which was used to fuel the Omni Data fraud; and
- Using the identity of a young man who died in Marblehead in 1985 to fabricate a supposed “President” for the fake company called Andover, and also using that identity as an accredited investor in Paradigm Tactical Products.
Latorella pleaded guilty to pleaded guilty to conspiracy to commit securities fraud, and was sentenced to five years in prison, in March of this year.
Drawn from a press release from the U.S. Department of Justice.