The former president and chief executive of a Costa Mesa skateboard manufacturer pleaded guilty Monday to one count of securities fraud related to fabrications he made about merger talks with Vans Inc.
Hubert Allen Jeffreys, founder of Earthboard Sports USA Inc., claimed his company was in merger talks with a "publicly traded major footwear company." The statements purportedly related to Vans, a Santa Fe Springs shoemaker, and were made from December 2001 to May 2003, according to federal prosecutors.
An Earthboard press release on May 6, 2002, reiterated the fabricated merger stating, "We still have a deal." Several weeks later, a press release quoted Jeffreys saying, "It's like being on the 98 yard line," according to prosecutors.
Nearly 20 investors lost $2 million because of Jeffreys' statements, federal prosecutors allege. Jeffreys, who is scheduled to be sentenced on Dec. 12, faces 20 years in federal prison and a potential fine of $5 million.
The investigation was conducted by the Federal Bureau of Investigation with assistance from the U.S. Securities and Exchange Commission.
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