U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23777 / March 13, 2017
Securities and Exchange Commission v. Gregory E. Webb, et al., No. 1:11-cv-07152 (N.D. Ill. filed Oct. 11, 2011)
United States v. Gregory Webb, 1:14-cr-00103 (N.D. Ill. filed Feb. 28, 2014)
Suburban Chicago Tech Executive Sentenced To 9 Years In Prison
On March 1, 2017, Gregory E. Webb, a defendant in an ongoing enforcement action filed by the Securities and Exchange Commission, was sentenced to nine years imprisonment in a parallel criminal action.
Webb, a 71-year-old resident of Arlington Heights, Illinois, was the Chairman, CEO, and President of InfrAegis, Inc., a now-defunct company. On February 28, 2014, a federal grand jury returned an 11-count indictment against Webb and, on July 11, 2016, a federal jury in Chicago found Webb guilty on nine of the eleven counts and found him not guilty on two of the eleven counts. On March 1, 2017, the Honorable Virginia M. Kendall of the U.S. District Court for the Northern District of Illinois sentenced Webb. In addition to the nine years' imprisonment, the court ordered Webb to pay $9 million in restitution.
Webb and InfrAegis are defendants in a SEC civil enforcement action based, in part, on the same conduct alleged in the criminal indictment. The SEC's complaint, filed on October 11, 2011, alleges that, from January 2005 through June 2010, Webb and InfrAegis orchestrated a fraudulent, unregistered offering of stock that raised at least $20 million from at least 395 investors. According to the SEC's complaint, Webb and InfrAegis made false and misleading claims about the company's commercial success and the existence of contracts for the installation of InfrAegis' products, including certain contracts that were alleged in the criminal indictment. The SEC's complaint charged Webb and InfrAegis with violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC's litigation, which has been stayed pending the outcome of the criminal case, is ongoing.