Former Plasticon executive convicted of fraud

Mike Verespej

Published: June 25, 2012 6:00 am ET

Related to this story

Topics Mergers & Acquisitions, Injection Molding, Thermoforming

LEXINGTON, KY. (June 25, 4:15 p.m. ET) — Former recycled plastics product executive James Norman Turek has been convicted on eight counts of securities fraud and five counts of tax fraud for defrauding some 8,500 investors nationwide out of $18 million.

The 66-year-old former president and CEO of now-defunct Plasticon International Inc. was convicted June 22 after a two-week trial in U.S. District Court in Lexington, Ky.

Turek is scheduled for sentencing on Sept. 27. He faces a maximum prison sentence of 20 years on each count of securities fraud and three years on each count of tax fraud.

According to an announcement from the U.S. District Attorney’s office in Lexington, the tax division of the Department of Justice, the Federal Bureau of Investigation and the criminal investigation division of the Internal Revenue Service, Turek lured about 8,500 investors between 2004 to 2006 by falsely claiming — in statements to investors and in press releases — that Plasticon owned valuable patents, and that the company was profitable.

According to the federal government, the Lexington, Ky., company had few sales, and Turek knew the firm was losing millions of dollars.

The evidence further showed that Turek had issued roughly 5 billion shares of company stock to himself and backdated promissory notes that claimed he had donated millions to the company — when he had not.

In order to circumvent SEC rules governing the sale of stock by a control person, he then transferred the stock into the names of friends and family members, including his deceased aunt, before selling the stock to unsuspecting investors, according to the indictment.

Turek was president and CEO and sole director of Plasticon from 1994-2007, giving him complete control over the firm’s affairs until October 2007, when a bankruptcy court-appointed trustee took control.

Plasticon filed for bankruptcy May 16, 2007, less than 18 months after it acquired injection molder and thermoformer Pro-Mold Inc. of St. Louis. The SEC suspended trading in the stock four months later and revoked the company’s securities registration two months after that.

According to the government’s news release, Turek filed false tax returns for the years 2003 through 2007, for “failing to report approximately $12 million that he stole from Plasticon.”

A federal grand jury had indicted Turek on charges of securities fraud and filing false income tax returns in March 2011 — about 2½ years after the Securities and Exchange Commission had filed charges against Turek in the same court, accusing him of misappropriating company funds for personal use.

SEC had charged that Turek had taken at least $2.8 million of the $8.2 million to $11.2 million in funds that Plasticon had raised from at least 30 investors — capital that the firm said would be used to buy equipment and acquire other companies.

Those funds were raised in an unregistered, multistate securities offering between January 2005 and April 2007, according to SEC.

Those charges were settled Feb. 11, 2009, when Turek, without admitting or denying the allegations, agreed to a judgment that found him liable for disgorgement of $2.6 million plus $557,836 in interest. However, the court waived payment of that total amount and did not order Turek to pay a civil penalty, based on a statement of financial condition that Turek filed with the court.


Comments

Former Plasticon executive convicted of fraud

Mike Verespej

Published: June 25, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

Globalization brings sizable growth, primarily in Asia

November 25, 2014 1:40 pm ET

In 1990, the year after Plastics News published our first issue, there were 33,000 injection molding machines sold worldwide. Fast forward to 2013,...    More

Image

Uni Cap to build cap molding plant in Jordan

November 25, 2014 12:57 pm ET

The Persian Gulf's largest molder of caps and closures is investing $10 million in a new factory near Amman, Jordan, as part of an effort to boost...    More

Image

Deal adds U.K. plant to DelStar

November 25, 2014 12:47 pm ET

Schweitzer-Mauduit International Inc. (SWM) is acquiring certain assets from the advanced wound management division of London-based Smith & Nephew...    More

Image

Onex buying packaging group SIG Combibloc

November 24, 2014 9:05 am ET

ex Corp. will buy SIG Combibloc Group, the Switzerland-based manufacturer of aseptic carton packaging and plastics closures from New Zealand's Rank...    More

Image

Canada's Papp Plastics is eyeing big opportunities with JV in Mexico

November 24, 2014 4:11 pm ET

Canadian injection molder and turnkey solution provider Papp Plastics & Distributing Ltd. will open an $11 million to $12 million joint venture facili...    More

Market Reports

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events