Richard E. Gray Press Release

July 24, 2002
For Immediate Release

NEW YORK ATTORNEY/FORMER CHAIRMAN OF ST. LOUIS BASED HOMESTAR INDUSTRIES PLEADS GUILTY TO BANKRUPTCY AND TAX CHARGES

St. Louis, Missouri: The former Chairman of HomeStar Industries, a Fenton, Missouri company that sold aluminum siding and other home improvement products by telephone before it was forced into bankruptcy in 1997, has pled guilty to a bankruptcy related charge and tax evasion, United States Attorney Ray Gruender announced today.

RICHARD E. GRAY, 57, an attorney licensed in New York, and formerly of 730 Park Avenue, New York, New York, and 50 North Street, Litchfield, Connecticut, pled guilty to one felony count of making false statements under oath during bankruptcy hearings. Gray also entered a guilty plea to a one-count information filed in the District of Connecticut charging him with tax evasion. Gray appeared this afternoon before United States District Judge Jean C. Hamilton.

Each count of conviction carries a maximum penalty of five years in prison and/or a fine of $250,000. Sentencing has been set for October 18, 2002. Gray remains incarcerated pending sentencing.

HomeStar was formerly known as A.I. Manufacturing when it was owned and operated by William Kaufman of St. Louis. In 1997, HomeStar's primary lender foreclosed on HomeStar's assets, and HomeStar's creditors filed a bankruptcy petition in order to share in the remaining assets. In the months before the bankruptcy petition was filed, William Kaufman passed away, and HomeStar received in excess of $1 million in life insurance proceeds which had been made payable to AI Manufacturing. Gray then caused these insurance proceeds to be diverted to other companies and accounts he controlled, according to the indictment. With his plea, Gray admitted that he made a false statement under oath in the bankruptcy proceedings when he said he did not know that AI Manufacturing was the former name for HomeStar at the time the life insurance proceeds were paid in 1997. This false statement was made to the bankruptcy trustee for the purpose of deceiving her as to the disposition of the insurance proceeds.

In addition to his indictment in St. Louis, Gray had been the target of a criminal investigation being conducted in Connecticut, which involved potential criminal violations of the Internal Revenue Code. According to John A. Danaher III, United States Attorney for the District of Connecticut, in order to resolve in a single proceeding both the pending indictment in St. Louis and the criminal tax investigation in Connecticut, Gray waived indictment in Connecticut and consented to the filing of a criminal information charging him with tax evasion. The case was then transferred from the District of Connecticut to the Eastern District of Missouri so that Gray could enter his plea of guilty today. The Connecticut information charges that between March 1995 and February 2002, Gray evaded payment of income taxes due for the calendar years 1984, 1985, 1986 and 1987, in the total amount of $370,927, by concealing the location, nature and extent of his assets, filing false financial statements, paying personal debts and expenses with money diverted from corporations that he owned or controlled and by placing money and property into other peoples' names.

"In a bankruptcy proceeding, the bankruptcy trustee and the bankrupt's creditors have a right to full and honest information about the bankrupt's assets," said Gruender. "The government will hold corporate officers and lawyers responsible when they provide false financial information to a bankruptcy trustee.

United States Attorney Gruender and United States Attorney Danaher praised the work on the cases by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division and St. Louis Assistant United States Attorney Jeffrey Jensen and Connecticut Assistant United States Attorney John Marrella.

UNITED STATES ATTORNEY'S OFFICE EASTERN DISTRICT OF MISSOURI RAYMOND W. GRUENDER United States Attorney	NEWS RELEASE
For further information: Call Public Affairs Officer Jan Diltz at (314) 539-7719
July 24, 2002 For Immediate Release NEW YORK ATTORNEY/FORMER CHAIRMAN OF ST. LOUIS BASED HOMESTAR INDUSTRIES PLEADS GUILTY TO BANKRUPTCY AND TAX CHARGES St. Louis, Missouri: The former Chairman of HomeStar Industries, a Fenton, Missouri company that sold aluminum siding and other home improvement products by telephone before it was forced into bankruptcy in 1997, has pled guilty to a bankruptcy related charge and tax evasion, United States Attorney Ray Gruender announced today. RICHARD E. GRAY, 57, an attorney licensed in New York, and formerly of 730 Park Avenue, New York, New York, and 50 North Street, Litchfield, Connecticut, pled guilty to one felony count of making false statements under oath during bankruptcy hearings. Gray also entered a guilty plea to a one-count information filed in the District of Connecticut charging him with tax evasion. Gray appeared this afternoon before United States District Judge Jean C. Hamilton. Each count of conviction carries a maximum penalty of five years in prison and/or a fine of $250,000. Sentencing has been set for October 18, 2002. Gray remains incarcerated pending sentencing. HomeStar was formerly known as A.I. Manufacturing when it was owned and operated by William Kaufman of St. Louis. In 1997, HomeStar's primary lender foreclosed on HomeStar's assets, and HomeStar's creditors filed a bankruptcy petition in order to share in the remaining assets. In the months before the bankruptcy petition was filed, William Kaufman passed away, and HomeStar received in excess of $1 million in life insurance proceeds which had been made payable to AI Manufacturing. Gray then caused these insurance proceeds to be diverted to other companies and accounts he controlled, according to the indictment. With his plea, Gray admitted that he made a false statement under oath in the bankruptcy proceedings when he said he did not know that AI Manufacturing was the former name for HomeStar at the time the life insurance proceeds were paid in 1997. This false statement was made to the bankruptcy trustee for the purpose of deceiving her as to the disposition of the insurance proceeds. In addition to his indictment in St. Louis, Gray had been the target of a criminal investigation being conducted in Connecticut, which involved potential criminal violations of the Internal Revenue Code. According to John A. Danaher III, United States Attorney for the District of Connecticut, in order to resolve in a single proceeding both the pending indictment in St. Louis and the criminal tax investigation in Connecticut, Gray waived indictment in Connecticut and consented to the filing of a criminal information charging him with tax evasion. The case was then transferred from the District of Connecticut to the Eastern District of Missouri so that Gray could enter his plea of guilty today. The Connecticut information charges that between March 1995 and February 2002, Gray evaded payment of income taxes due for the calendar years 1984, 1985, 1986 and 1987, in the total amount of $370,927, by concealing the location, nature and extent of his assets, filing false financial statements, paying personal debts and expenses with money diverted from corporations that he owned or controlled and by placing money and property into other peoples' names. "In a bankruptcy proceeding, the bankruptcy trustee and the bankrupt's creditors have a right to full and honest information about the bankrupt's assets," said Gruender. "The government will hold corporate officers and lawyers responsible when they provide false financial information to a bankruptcy trustee. United States Attorney Gruender and United States Attorney Danaher praised the work on the cases by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division and St. Louis Assistant United States Attorney Jeffrey Jensen and Connecticut Assistant United States Attorney John Marrella.