Alfred Teo Sr., owner of plastic bag and film maker Sigma Plastics Group, will spend 30 months in prison and pay a $1 million fine for securities fraud and insider trading.
Teo was sentenced Feb. 6 in U.S. District Court in Newark, N.J. He had been free while awaiting sentencing after pleading guilty to the charges June 27.
The case did not involve Sigma. Teo was accused of sharing inside information about Musicland Stores Corp., where he was the largest shareholder, and Cirrus Logic Inc., where he served as a director.
The prison time is on the low end of what he could have received. Under the terms of a plea deal, Teo faced 30-37 months in prison, down from up to 50 years under the original charges.
Teo will begin serving his sentence after April 10. His lawyer, John Farmer Jr., has requested a minimum security prison, such as one in Morgantown, W.Va., but the decision is up to the Bureau of Prisons.
Farmer said Teo has prepared for a management transition at Sigma.
Teo's son, Mark, will be appointed president and chief executive officer. Teo's other sons, Alan and Alfred Jr., will serve as executive vice president and vice president of purchasing, respectively. Another son, Andrew, will oversee financial areas, including serving as chief financial officer of several sister companies.
``He's optimistic about the continuity of the business,'' Farmer said about Teo Sr. in a Feb. 6 telephone interview. ``He's looking forward to getting on with the rest of his life and restoring his reputation to the extent that it was damaged. He has a lot of faith in his sons.''
Lyndhurst, N.J.-based Sigma reported $1.35 billion in sales last year, ranking No. 2 in Plastics News' list of North American film and sheet manufacturers.
Teo was sentenced by Judge Katharine Hayden. In requesting a light sentence, Farmer had submitted a 24-page memorandum on behalf of Teo defending his character, along with 121 letters from competitors, partners and community leaders attesting to Teo's morals. The insider trading was an aberration, Farmer said.
In a document filed Feb. 4 with the court, assistant U.S. Attorney Craig Carpenito said calling Teo's conduct an aberration defies the ordinary definition of the word.
``The defendant further seeks to justify his conduct in Musicland by blaming the management of the company,'' Carpenito wrote. ``The [prosecution] submits that the version of the facts as presented by the defendant in his memorandum is a one-sided, self-serving statement that ignores reality.''
The guilty plea ends Teo's federal trial, but he still faces civil charges filed by the Securities and Exchange Commission. That case is ongoing, said Gerald Gross, SEC assistant regional director in New York.
``When it will come to a conclusion, I can't predict,'' Gross said. ``There's not a civil trial date set.''
