A former Campbell city mayor has been sentenced to nearly five years in prison for investment fraud. In addition, the presiding judge ordered the former Campbell mayor, George Krinos, to pay $1,211,385 in restitution to his victims.
Krinos Holding Securities Fraud Scheme
The 39-year-old former Campbell mayor of a small town in Ohio was accused of orchestrating a nearly $1.2 million investment fraud scheme from 2011 to 2014. Krinos ran a company known as Krinos Holdings to sell securities to at least ten people in Ohio, causing them significant financial losses.
Since the securities were unregistered, Krinos exclusively sold them to “accredited investors”– individuals with a net worth in excess of $1 million or who met specific, high-dollar income thresholds.
Krinos told investors that the fund would be used to provide venture capital for various client companies seeking funds from Krinos Holdings. In exchange, he promised that initial investments would rise in value as much as $5 or $6 per share.
Instead of using the funds raised for business purposes, Krinos used the money for personal expenses and to engage in unauthorized foreign currency transactions.
To cover up the scheme, Krinos told investors that he had more than $600 million under management and submitted falsified letters and statements that reflected high account balances. The personal expenses were passed off as “sales and marketing” costs.
By law, securities sold have to be registered with the Securities and Exchange Commission (SEC).
Securities Fraud Accompanied by Failing to Pay Tax
In January, Krinos pleaded guilty to one count of securities fraud and one count of willfully failing to pay taxes. In addition to the securities fraud scheme, Krinos also improperly withheld taxes from his employees, without paying those taxes to the IRS. The taxes, including federal income taxes and Federal Insurance Contribution Act taxes, total to approximately $91,495.
Krinos was mayor of Campbell, Ohio from 2010 to 2011.
Have You Been a Victim of Securities Fraud?
If you are the victim of securities fraud or believe you have been scammed, you may have certain legal rights that require your immediate attention.
Call an Investment Fraud Attorney Today
With offices in Los Angeles, New York, West Palm Beach and Miami, the securities lawyers at Dimond Kaplan & Rothstein, P.A. represent clients nationwide and may be able to help you recover your investment losses.
Contact an attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.