Huntsman Corp. recently filed a civil suit against a former employee who pleaded guilty in May in federal court on two felony counts in connection with defrauding the company out of more than $3.7 million. The Salt Lake City firm filed the civil action in Floyd County Superior Court in Rome, Ga. Howard W. Gray Jr., a 45-year-old financial executive hired by Huntsman in May 1993 as controller at its Huntsman Film Products Corp. plant in Calhoun, Ga., requested more funds than needed to meet payroll requirements of the subsidiary, according to information released by the U.S. Attorney's office in Atlanta.
Between June 1993 and February 1996, Gray provided ``false and fraudulent'' information to officials at Huntsman Packaging Corp. in Salt Lake City, concerning employee payroll. Gray diverted the excess funds from Huntsman accounts to personal and brokerage accounts he controlled, the release said.
Court documents in the civil suit pending against Gray show that he made an annual salary of about $52,000 when he was dismissed from the company in March 1996. Records also state that Gray owned a 6,000-square-foot home valued at $500,000 in an exclusive area of Rome, along with several other properties, businesses and seven cars he acquired during his employment with Huntsman.
On March 1, Huntsman attorneys filed a temporary restraining order freezing all the businesses owned by Gray, including three pizza restaurants. On March 5-6, federal agents searched the homes and businesses, and Gray's bank accounts and stocks were seized, according to court documents on file in U.S. District Court in Rome.
Special Agents of the Federal Bureau of Investigation conducted the investigation after an audit by Huntsman officials turned up inconsistencies in company records.
In April, an order signed in Floyd County Superior Court gave Gray's attorney, Todd W. Carroll, permission to operate one of the businesses, Cedar Creek Lodge and Chalets in Cave Spring, Ga. Terms of the order state that Gray must not benefit personally from any of the monies generated by the business, and Huntsman must approve expenditures in excess of $500.
Gray's attorney did not return telephone calls.
Huntsman's attorney, Dorothy Kirkley in Atlanta, said no date has been set for the trial in the civil suit. She declined to comment further except to confirm information contained in the court documents.
Gray's sentencing is scheduled for Aug. 9 in U.S. District Court. Gray could receive a maximum of 10 years in prison and a fine of more than $7.5 million.