CEO Of Broker-Dealer Sentenced In Manhattan Federal Court For Obstructing Regulatory Examination By Producing False Invoices To SEC Exam Team
Preet Bharara, the United States Attorney for the Southern District of New York, announced that CHARLES J. MOORE, former Chief Executive Officer of broker-dealer Crucible Capital, Inc. (“Crucible”), was sentenced today to six months in prison for obstructing a regulatory examination conducted by the Securities and Exchange Commission (“SEC”). The sentence was imposed by U.S. District Judge Colleen McMahon. MOORE, 63, pled guilty on November 9, 2015, to having caused a Crucible employee to falsify invoices and then provide them to an SEC examination team in response to a document request.
According to the agreement pursuant to which MOORE entered his plea of guilty, the underlying criminal Complaint filed August 7, 2014, the Indictment filed on September 30, 2014, and statements made during court proceedings:
MOORE was at all relevant times the CEO of Crucible, an SEC-registered broker-dealer that maintained no customer securities trading accounts, but held itself out as a “boutique” investment bank helping small businesses to raise capital and financing. Crucible used its status as an SEC-registered broker-dealer to solicit business.
MOORE was also at all relevant times the CEO of an affiliated company, Angelic Holdings LLC (“Angelic”), which was not registered with the SEC and which conducted “due diligence” for Crucible-related business. Crucible and Angelic shared employees and office space. They also shared expenses, under an agreement that had Crucible paying Angelic a monthly fee and Angelic paying vendors of certain specified services on behalf of both Angelic and Crucible.
As an SEC-registered broker-dealer that maintained no customer accounts, Crucible was required to maintain net capital of at least $5,000 at all times. It was also required to file monthly “FOCUS” reports with the SEC reporting its net capital.
In the fall of 2013, the SEC opened a regulatory examination of Crucible to explore, among other things, the accuracy of the net capital figures that Crucible had supplied in its FOCUS reports from in or about February 2013 through in or about September 2013. As part of that examination, the SEC requested all 2013 invoices to Angelic for Crucible-related expenses.
MOORE, responding to this request, caused a Crucible employee to create falsified invoices to deliver to the SEC. Specifically, he directed the employee to take original invoices that had been sent to Crucible personnel, and create versions of those invoices that omitted references to large, unpaid debts appearing on the originals. MOORE then caused the employee to hand the falsified invoices to the SEC. The purpose of this obstruction was to hide the true extent of Crucible’s debts from the regulatory examination team, and thus make it appear, falsely, that Crucible’s net capital figures, as reported in its 2013 FOCUS reports, were accurate.
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Mr. Bharara praised the investigative work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation and thanked the SEC, which filed civil charges in a separate action.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Sarah Eddy McCallum is in charge of the prosecution.