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

Deal puts Convergence Packaging under Comar's umbrella

October 24, 2014 2:00 pm ET

Convergence Packaging Holdings LLC, itself a product of mergers, now is joining together with Comar LLC.    More

Image

Akro-Plastic buying German subsidiary from Metabolix

October 24, 2014 3:32 pm ET

Akro-Plastic GmbH, a Niederzissen, Germany-based plastic compounder, has purchased the assets of Metabolix Inc.'s subsidiary in Germany.    More

Image

Gerresheimer opens first development center in China

October 24, 2014 1:34 pm ET

Medical molder Gerresheimer AG has launched a development center for medical plastic systems in Dongguan, China.    More

Image

SRG opens second China auto parts factory

October 24, 2014 11:25 am ET

U.S. automotive supplier SRG Global Inc. said Oct. 23 it is opening its second plant in China, an injection molding, plating and painting facility in ...    More

Image

Investment firm buys Ontario cap molder

October 23, 2014 2:01 pm ET

A company whose varied interests include food and refrigerated transportation businesses is now moving into plastic caps.    More

Market Reports

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

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

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

More Events