Former President Of International Outdoor Advertising Company Pleads Guilty In Manhattan Federal Court To Participating In $19.75 Million Accounting Fraud Scheme
FOR IMMEDIATE RELEASE
Monday June 11, 2012
Preet Bharara, the United States Attorney for the Southern District of New York, announced that TODD HANSEN, the former President of the United States division of an international outdoor advertising company (the “Company”), pled guilty today in Manhattan federal court in connection with his participation in a five-year, $19.75 million accounting fraud scheme designed to make it appear that the Company was meeting certain performance targets so that he could receive higher salary increases and bonuses. HANSEN pled guilty today before U.S. District Judge Jed S. Rakoff.
Manhattan U.S. Attorney Preet Bharara said: “Todd Hansen and his co-coconspirator engaged in accounting sleight-of-hand for the sole purpose of self-enrichment, in violation of the securities laws, and his fiduciary and ethical duties to his company and its shareholders. They have now both admitted their guilt and will be punished accordingly.”
According to the Complaint and the Indictment filed in Manhattan federal court:
From 2004 until 2009, HANSEN served as President of the Company, a wholly-owned subsidiary of a United Kingdom corporation, with its common stock listed on the London Stock Exchange. HANSEN, together with Finance Director, James Buckley, directed the Company’s controller (the “Controller”) to make fictitious accounting entries in the Company’s books and records in order to give the appearance that the Company was meeting its monthly performance targets. To create these inflated income figures, HANSEN directed the Controller to record higher monthly revenues from either false client billings or rebates on certain goods and services that the Company was purportedly receiving from some of its vendors.
These false accounting entries resulted in the preparation of financial statements that reflected artificially inflated monthly income amounts for the Company. HANSEN was thereby able to create the misimpression that the Company was meeting its projected financial performance goals. During this five-year period, the fraudulent entries HANSEN requested resulted in a total overstatement of the Company’s net income by approximately $19.75 million. As a result of meeting these fictitious performance goals, HANSEN was paid approximately $1.1 million in salaries and bonuses over the five-year period.
In addition to the accounting fraud scheme, during this same time period, HANSEN misused tens of thousands of dollars of Company funds to pay for expenses and fees that directly benefitted him, his family, and friends, and that were unrelated to the Company’s legitimate business.
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HANSEN, 48, of Bakersfield, California, pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud, and faces a maximum sentence of 40 years in prison. He is scheduled to be sentenced by Judge Rakoff on October 11, 2012 at 4:00 p.m.
Buckley, 48, of Westwood, New Jersey, pled guilty on June 1, 2012 before U.S. Magistrate Judge Henry B. Pitman. He faces a maximum sentence of 40 years in prison, and is scheduled to be sentenced by Judge Rakoff on October 4, 2012 at 4:00 p.m.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Christopher D. Frey and Nicole Friedlander are in charge of the prosecution.