SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21679A / September 30, 2010
Accounting and Auditing Enforcement Release No. 3193A / September 30, 2010
SEC PREVAILS IN TRIAL AGAINST W. ANTHONY HUFF AND OTHERS IN A MULTI-MILLION FINANCIAL FRAUD INVOLVING A FORT LAUDERDALE, FLORIDA COMPANY
Securities and Exchange Commission v. W. Anthony Huff, et al., Civil Action No. 08-60315-CIV-ROSENBAUM (S.D. Fla.)
The Securities and Exchange Commission announced today that W. Anthony Huff was found liable for violations of the anti-fraud provisions of the federal securities laws stemming from a fraudulent scheme to hide his control over and subsequently loot a Fort Lauderdale professional employment company of millions of dollars.
A 122-page order from the Honorable Robin S. Rosenbaum, United States Magistrate Judge for the Southern District of Florida, found Huff liable for violating Sections 10(b) and 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934 and Section 17(a) of the Securities Act of 1933, and aiding and abetting other violations of the federal securities laws in connection with his involvement with Certified Services, Inc., formerly located in Fort Lauderdale. The Magistrate ordered Huff to pay disgorgement of more than $10 million, representing illegally obtained monies, prejudgment interest of approximately $3 million, and a civil penalty of $600,000. The opinion followed a seven-day bench trial in February.
According to the Court’s findings, Huff engaged in a scheme to overstate Certified’s financial condition in public filings with the SEC from the third-quarter of 2002 through the third-quarter of 2004. The opinion found Huff and others accomplished this scheme by, among other things, recording $47 million in bogus letters of credits on Certified’s books and records. The Court further found Certified’s public filings were materially false and misleading because they omitted Huff’s criminal background and undisclosed control over Certified.
The Court found that at the same time Huff was misstating Certified’s financial condition, he and associates engaged in a series of transactions so “Huff and his friends could enjoy the high life.” Huff acted egregiously to “avoid disclosing his negative history and to obscure his involvement with” Certified to loot the company, the opinion stated. “The scheme went on for more than two years, and he was able to obtain more than $10 million for himself and his family through his wrongdoing.”
The Court enjoined Huff from further violating certain provisions of the federal securities laws and rules and barred him from serving as an officer or director of any publicly traded company. In addition to the disgorgement and penalty order against Huff, the Court ordered Relief Defendant Sheri Huff to disgorge $3.8 million and Relief Defendant Midwest Merger Management, LLC to disgorge more than $10 million, representing illegally obtained monies and held Huff jointly and severally liable with Sheri Huff and Midwest.
For more information on earlier actions in this case, see LR-20481 (March 6, 2008), LR-20612 (June 10, 2008) and LR-21047 (May 19, 2009).