Microcap Company CEO Convicted Of Securities Fraud For Falsely Claiming Millions In Revenue From Contracts With Foreign Countries
NEWARK, N.J. – The chief executive officer of a publicly traded microcap company was convicted at trial for orchestrating a multi-million securities fraud scheme using false reports with the U.S. Securities and Exchange Commission, U.S. Attorney Craig Carpenito announced today.
Cary Lee Peterson, 38, of Phoenix, Arizona, was found guilty of all three counts of an indictment charging him with two counts of false certification in SEC filings and one count of securities fraud. He was convicted following a two-week trial before U.S. District Judge Anne E. Thompson in Trenton federal court. The jury deliberated for approximately an hour before returning its verdict on May 23, 2018.
According to documents filed in this case and evidence presented at trial:
Peterson, as CEO of RVPlus Inc., filed numerous false reports with the SEC, including:
- On Aug. 21, 2012, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $1.8 billion with the Ministry of Environment for Katsina State within the Federal Republic of Nigeria to provide unspecified green energy products and services.
- On Nov. 16, 2013, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $90 million with the Commission of the Foreign Affairs to the Senate for the Republic of Haiti.
- On Dec. 21, 2012, Peterson falsely certified on Form 10-Q that RVPlus held $8,653,846 in short-term accounts receivable for services rendered under the Nigeria agreement, despite prior warnings from RVPlus’ auditors that reporting these receivables as revenue was improper.
- On Dec. 27, 2012, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $10.5 million with the Federal Ministry of Planning & Economic Affairs for the Republic of Liberia.
- On March 28, 2013, Peterson falsely certified on SEC Form 10-Q that RVPlus held $17,590,837 in short-term accounts receivable from, among other sources, the Haiti and Liberia agreements.
The SEC suspended trading in RVPlus on July 19, 2013, due to questions concerning the accuracy of RVPlus’ periodic financial filings, including reported accounts receivable, assets, and operations.
Peterson also claimed that ECCO2 Corp., a not-for-profit owned by Peterson was an “affiliate organization” of the U.N. Convention on Climate Change. Peterson claimed that “[t]his 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.” ECCO2 was never an affiliate of the U.N. Convention on Climate Change. In fact, the U.N. wrote to Peterson on two separate occasions demanding that ECCO2 stop claiming that it was.
The false certification counts each carry 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. Sentencing will be scheduled at a later date.
The SEC has a pending civil complaint against Peterson in New Jersey federal court alleging multiple counts of securities fraud.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation. He also thanked FBI special agents under the direction of Special Agent in Charge John F. Bennett in San Francisco for their assistance with Peterson’s arrest, and the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Regional Director Marc P. Berger and Senior Associate Regional Director Sanjay Wadhwa, for its assistance.
The government is represented by Assistant U.S. Attorney Ari Fontecchio of the U.S. Attorney’s Office Criminal Division and Executive Assistant U.S. Attorney Zach Intrater.
Defense counsel: Eric J. Marcy Esq., Woodbridge, New Jersey