Former KB Home CEO indicted on fraud charges

Former KB Home CEO indicted on fraud charges

LOS ANGELES—A federal grand jury on Thursday returned an indictment charging the former chairman and chief executive of KB Home with multiple counts of fraud and other crimes related to a stock option backdating scheme that authorities say bilked the homebuilder's shareholders out of millions of dollars.
The 20-count indictment charges Bruce E. Karatz with 15 counts of mail, wire and securities fraud, four counts of making false statements in reports filed with the Securities and Exchange Commission, and one count of lying to the company's accountants, according to the U.S. attorney for the Central District of California.

Karatz, 63, faces up to 415 years in prison if convicted on all charges.

"Mr. Karatz allegedly broke the rules, and then lied about it, to line his pockets and then to conceal his windfall from his company and the trading public," said United States Attorney Thomas P. O'Brien.

Karatz, who lives in the Bel Air Estates neighborhood of Los Angeles, agreed in September to pay $7.2 million to settle civil charges of backdating stock options.

Under terms of the settlement, the executive didn't admit or deny the allegations brought by the SEC, which claimed he profited by more than $6 million from exercising many of his stock options

Like I've been saying as the economy falls to pieces alot of fraud, enough that it will cause civil unrest, will be brought to light. Those who are cheating America you are on notice. This will not continue much longer. I recommend you cut your losses and run.

[edit on 6-3-2009 by projectvxn]

Somehow I think this economy that we are in is STAGED to catch all the Crooks like this, they must be stealing not only from us but from the extreme Elite and they are not happy.




[edit on 6-3-2009 by 38181]

reply to post by 38181


It's not exactly rigged. But if the numbers don't match and you're sending people consistent returns(At least on paper) when the market collapses your inconsistencies stand out more. So you get a spot light placed on you and your fraud is exposed. It's more a natural consequence than a derived tool.