Saturday, March 7, 2009

Sterling guilty: stealing $278 million is only worth 5 years

Jack Sterling, convicted greedhead. Photo from WSPA-TV.

South Carolina Greedhead extraordinaire, Jack Sterling, gets to keep all his stolen booty, while the poor people he defrauded get... what? What do they get?

Some poor trailer park/ghetto kid holds up a liquor store for $200 and gets how many years? And this swine steals the life savings of 12,000 working people, and gets five years and is still free on bond.

God Bless America.

Sterling sentenced to 5 years in securities fraud case
March 6, 2009 • Greenville News

LEXINGTON -- Former HomeGold chairman Jack Sterling was sentenced to five years in prison today after a jury found him guilty on one count of securities fraud, marking the end of the state’s lengthy investigation into a financial collapse that cost 12,000 people, most from the Upstate, an estimated $278 million.

Sterling, 70, was the final defendant among six former HomeGold or Carolina Investors officers who were indicted by a state grand jury and prosecuted by the Attorney General’s Office. All were either convicted or pleaded guilty.

Sterling will remain free on bond.

Sterling had been charged with two counts of securities fraud and one count of conspiracy.

Attorney General Henry McMaster called the state investigation "the largest and most complex white-collar probe in South Carolina’s history."

McMaster said in a statement: "There were a total of six prosecutions in the Carolina Investors case. All six prosecutions were successful.

"Sadly, even a guilty verdict cannot undo the heartbreaking losses suffered by thousands of investors, many of whom saw their life-savings taken away. It is our hope that the success of these prosecutions and the resulting improvements to our securities laws will dissuade criminals from attempting to deceive the people of South Carolina."

The jury reached its decision after 13 hours of deliberation over three days, and Circuit Judge Edward Cottingham sentenced Sterling less than an hour later.

Sterling had no visible reaction as Cottingham gave the sentence, but a gasp was heard from his group of supporters.

Prosecutors had urged the judge to sentence Sterling to 10 years, the maximum for a count of securities fraud.

After 3 1/2 weeks of testimony, and a review of scores of exhibits, what emerged was a state portrait of Sterling as not only involved in the day-to-day operations of HomeGold after its merger, but involved to the point that he exercised control over the business.

At the same time, Sterling’s defense countered with its view that the longtime Greenville businessman was a chairman who was disengaged from the company’s daily business and others were at fault and to blame for the collapse of Pickens-based Carolina Investors, a HomeGold subsidiary.

Deputy Attorney General Jennifer Evans said in her closing argument that prosecutors worked to prove "beyond a reasonable doubt that the defendant, Jack Sterling, is guilty of securities fraud through a scheme to defraud, that he is guilty of giving false information, directly or indirectly, to the (state) securities commission and he is involved in this conspiracy."

"This was a very complex case and lots of documents," Evans said. "But it really isn’t a complex case."

"It is a simple case and a simple answer," she told the jurors.

At issue, she said, "is whether or not the folks up in Pickens, the people at Carolina Investors, understood the whole truth about what was going on at HomeGold," and whether information was filtered through Sterling and others.

"We have not stood here since day one and said everything is on Jack Sterling," Evans said. "We told you at the beginning of this trial that this was a conspiracy case and this was a scheme that involved several different people. But every person played a role in this."

She said it was clear the Carolina Investors securities holders "absolutely" didn’t know about the safety of their investments.

Sterling, she said, played "a very, very important role" as a director of HomeGold and Carolina Investors.

"We’re not here to argue whether or not he’s a good man, whether or not he has a good family, whether or not he has a good heart," Evans said.

In this case, there were "several omissions" of key information to Carolina Investors’ board and the company’s note holders and "an omission is the equivalent of a lie" under securities fraud laws, Evans said.

It was Sterling’s fiduciary duty to give "full and accurate disclosure," Evans said.

Instead, Sterling "purposely" kept information from the Carolina Investors directors to avoid "a run on the bank," Evans said.

Sterling’s fingerprints, Evans said, were "all over everything."

Asked by Evans under cross-examination if he met with Sheppard after the collapse, and told him, "if we just tell everybody it was just business, we’ll all be OK," Sterling testified, "I remember the meeting. I don’t remember that comment."

"You remember the meeting, but you don’t remember saying, ‘if we all stick to this, it’s just business, we’ll all be OK?’" Evans asked.

"No," Sterling testified. "What I do remember mostly about that meeting is Mr. Sheppard telling me how well EMMCO was going, but he was concerned about his lending sources being affected by the collapse of HomeGold. That’s what our primary conversation was."

Asked if he expected other Carolina Investors or HomeGold officials such as Larry and Anne Owen, Lt. Gov. Earle Morris Jr., Karen Miller and Sheppard to plead guilty or be convicted by a jury, and subsequently cooperate with state investigators, Sterling testified, "Not only did I not expect it, but I had no idea that the people you just named were guilty and had been lying to investors."

Sterling testified he was a member of the HomeGold and Carolina Investors boards, and was HomeGold’s chairman until June 2002.

He invested $2 million in HomeGold stock, watched the value increase to more than $16 million, but ultimately lost his investment, he testified.

Sterling testified that in hindsight, he would have done things differently at HomeGold.

He and other company officials made mistakes and the result was "some good people lost their money," Sterling testified.

But he testified that in 1998, when HomeGold’s net worth began evaporating and it started losing money, and in subsequent years, repaying investors was "the constant thing in our minds."

At one point, Sterling’s attorney, Bart Daniel, asked him, "Did you ever, Mr. Sterling, lie, cheat or steal while you were at Carolina Investors or HomeGold?"

"No, sir, I did not," Sterling testified.

Sterling’s attorneys argued that as a member of the boards of HomeGold and Carolina Investors during periods of financial difficulties, Sterling participated with other directors and relied on outside auditors and lawyers, including the Wyche law firm in Greenville, to provide guidance to senior management for the benefit of shareholders and investors.

Several current or former members of the Wyche firm testified as defense witnesses and described their review of regulatory filings, business transactions, investors’ prospectus and press releases.

Defense attorneys alleged it was Sheppard, not Sterling, who was primarily responsible for HomeGold’s collapse since as CEO Sheppard replaced nearly all of Sterling’s management team and took control the company’s operations.

They said others, such as former HomeGold chief financial officer Karen Miller, were part of the conspiracy that led to the collapse of Carolina Investors.

Sheppard is serving a 20-year prison term for his conviction on various charges.

Miller, who testified for three days for the prosecution, is awaiting sentencing for her guilty plea to conspiracy in filing misleading reports with the SEC and withholding key information from Carolina Investors board members.

True justice: when they are forced to PAY PEOPLE BACK WHAT THEY STOLE. WITH INTEREST.

And if they can't? Bankruptcy. No nice cars and vacation homes for Sterling, Miller, Sheppard, the Owenses, etc.

Jail is NOT good enough for these greedy pigs.


Renee said...

What gets to me is that these crimes continue to happen. These rich white CEO's are destroying lives when they rip people off. Though it is financial, it is a particular form of violence and that needs to be acknowledged.
I have always reminded others that though society has a tendency to paint young black men as criminal thugs we make no such association with the rich white man in the business suit despite the fact that they are guiltu of so many crimes. They are never viewed as a threat and are instantly trusted as a voice of authority. It is race and class privilege that allows these men to get away with the crimes that they commit.

cybercelt said...

There is one world, legal system and ethics for the rich white man. If one of them happens to get some jail time, they get a pardon from the governor or president.

I think they should be strapped of all personal wealth and excess wealth. They should be able to have a car, a house and college funds for their kids.

Anonymous said...
This comment has been removed by a blog administrator.
mikeb302000 said...

Here is my solution. Lots of people are so angry at these guys they can't agree. But, that reminds me the vengeance factor in why many people favor capital punishment.

sheila said...

Yup, that sucks. But it IS America. There's different rules for different classes. That's fo' sho'.

It makes me totally sick.

JoJo said...

This is just CRAP. This kind of shit just goes up my ass a mile. It's so not fair. How can he be allowed to KEEP the money?

Dave Dubya said...

And as Dylan sang back in the Reagan years, and is now ever more fitting:

“They say that patriotism is the last refuge
To which a scoundrel clings.
Steal a little and they throw you in jail
Steal a lot and they make you king.”

-Sweetheart Like You (Infidels)

mythago said...

Maybe he could sell a kidney.

DaisyDeadhead said...

Last executive faces judge in S.C.'s biggest bankruptcy THE ASSOCIATED PRESS • May 26, 2009

CONWAY, SC -- The saga of Carolina Investors and its parent company HomeGold Financial Inc. is ending with the sentencing of the last of six executives convicted in the case.

South Carolina Circuit Judge Edward Cottingham plans to sentence former HomeGold Chief Financial Officer Karen Miller on Tuesday afternoon at the Horry County Courthouse.

Miller pleaded guilty to conspiracy in 2005 and has cooperated with prosecutors ever since. She faces anywhere from probation to five years in prison. Prosecutors don't plan to make a sentencing recommendation.

Cottingham has said before anyone convicted in the case should go to jail.

Carolina Investors remains the biggest bankruptcy in state history. About 8,000 investors lost $275 million when the company went under in 2003.

DaisyDeadhead said...

Guilty of stealing $278 million and he still hasn't served any time. Its good to be king!

Sterling appealed his conviction today.Sterling filed his appeal today. The business community is worried that this may make SC look bad to investors.. ..hey, screw those 12,000 people who had their pensions stolen, collateral damage! The business climate is the important thing.

They don't seem to be worried that this makes SC look like a state that coddles evil greedhead pigs. I wonder why?

WYFF said...

COLUMBIA, S.C. -- The state Supreme Court has upheld the conviction of a former executive involved in one of the biggest bankruptcies in South Carolina history.
The justices on Wednesday also affirmed the five-year prison sentence of former HomeGold Chairman Jack Sterling.
Sterling has 15 days to file a petition for rehearing. If he does not, the Supreme Ct. will issue an order for the original sentencing to be carried out.
Sterling was one of six executives who were convicted by a jury or pleaded guilty after HomeGold subsidiary Carolina Investors went bankrupt in 2003, leaving 8,000 investors with combined losses of $275 million.
Sterling has been free on $100,000 bond during his appeal. He was found guilty of securities fraud in 2009.
Sterling was one of six executives who were convicted or pleaded guilty after HomeGold's subsidiary, Carolina Investors, went bankrupt in 2003. More than 8,000 investors suffered a combined loss of about $275 million.
Sterling's attorneys argued that prosecutors never proved their case, saying the former executive didn't know company officials were making false statements to investors.
Attorneys for Sterling also said a judge shouldn't have allowed heartbreaking testimony during his 2009 trial from investors who lost nearly everything.
On Wednesday, his attorneys didn't immediately return a message seeking comment.