UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17816 / October 30, 2002
ACCOUNTING AND AUDITING ENFORCEMENT RELEASE NO. 1656 / October 30, 2002
SECURITIES AND EXCHANGE COMMISSION V. LARRY OHMS, Defendant, Civil Action No. 3:02-CV-2361-D (U.S.D.C. N.D. TX)(Dallas Division)
SEC CHARGES FORMER OFFICER OF PUBLICLY TRADED COMPANY WITH FINANCIAL FRAUD
On October 29, 2002, the Securities and Exchange Commission filed a securities fraud case in the United States District Court for the Northern District of Texas (Dallas Division) against Larry Ohms, the former treasurer of Dallas-based United States Lime & Minerals, Inc. (Nasdaq: USLM) ("U.S. Lime" or "the company"). The SEC charged Ohms with financial fraud and other securities law violations related to his embezzlement of nearly $2.2 million from the company during a four-year period. Ohms, age 40, resides in Carrollton, Texas
According to the complaint, Ohms held a number of positions at U.S. Lime between January 1998 and December 2001, including corporate controller, secretary, treasurer, and vice president of finance. During that period, Ohms forged the signatures of other company officers on dozens of checks, and falsified the company's check register to create the appearance that the amounts that he personally received or gave to his creditors went to vendors for U.S. Lime's legitimate business expenses. Initially, Ohms embezzled relatively small amounts, but over time, his thefts escalated. By January 2002, his thefts were too large to conceal, and Ohms abruptly resigned.
The SEC further alleges that Ohms acted alone, and without the knowledge of other U.S. Lime employees. Throughout the relevant period, Ohms supervised U.S. Lime's internal accounting controls and financial reporting, and he used his position to escape detection by falsifying the company's books and records, lying to its outside auditors, and preparing false financial statements that he then caused the company to file with the SEC.
The company's management, with the help of its outside auditors, discovered the fraud shortly after Ohms resigned. The company immediately reported Ohms' misconduct to the SEC, the criminal authorities, and the Nasdaq. U.S. Lime also hired expert securities counsel to conduct an internal investigation, and cooperated fully with the SEC's investigation of the matter.
The specific charges against Ohms include securities fraud, circumventing internal controls, falsifying books and records, lying to auditors, violations of periodic reporting and books and records requirements, in violation of, or aiding and abetting violations of, Sections 10(b), 13(a)(2), 13(b)(2)(A), and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1, 13a-13, 13b2-1 and 13b2-2 thereunder. In its Complaint, the Commission requested that Ohms be enjoined from future securities violations, that he be barred from serving in the future as an officer or director of a public company, and that he be ordered to disgorge the full amount that he stole from U.S. Lime, with prejudgment interest.