SEC Obtains Final Judgments Against Former CEO and COO of Indiana-Based Plastics Manufacturer
Litigation Release No. 25273 / November 24, 2021
SEC v. Kevin R. Kuhnash and Jason P. Jimerson, No. 19-CV-00028 (S.D. Ind. filed Feb. 12, 2019)
United States v. Kevin Kuhnash and Jason Jimerson, No. 18-CR-078 (S.D. Ind.)
The Securities and Exchange Commission announced today the entry of final judgments against Kevin Kuhnash and Jason Jimerson, two former high ranking executives of Indiana-based plastics manufacturer, Lucent Polymers, Inc.
The SEC's complaint, filed on February 12, 2019 in the United States District Court for the Southern District of Indiana, alleged that Kuhnash, the former Lucent CEO, and Jimerson the former Lucent COO, engaged in a scheme to conceal that the company's core business model was a sham in connection with the company's acquisition by another manufacturer in 2013. According to the SEC's complaint, Lucent routinely lied to its customers and falsified its certifications of test data to show that its products complied with customer specifications, including on important aspects such as fire-retardant measures. Kuhnash and Jimerson allegedly hid Lucent's fraudulent practices, made misrepresentations to the company that acquired Lucent, and continued the fraud even after the sale of the business to secure future payments.
In a parallel action with the United States Attorney's Office for the Southern District of Indiana, Kuhnash pleaded guilty to two counts of securities fraud and one count of money laundering and Jimerson pleaded guilty to two counts of securities fraud, one count of money laundering, and one count of making false statements to federal agents. On March 2, 2021, Kuhnash was sentenced to 36 months of imprisonment, followed by one year of supervised release, and ordered to pay a $10,000 fine. On March 25, 2021, Jimerson was sentenced to 24 months of imprisonment, followed by two years of supervised release, and ordered to pay a $10,000 fine.
On November 24, 2021, the United States District Court for the Southern District of Indiana entered final judgments by consent against Kuhnash and Jimerson. Pursuant to the final judgments, Kuhnash and Jimerson were permanently enjoined from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and barred from serving as officers or directors of a public company. Kuhnash was ordered to pay disgorgement of $1,394,498, with prejudgment interest of $422,319. Jimerson was ordered to pay disgorgement of $648,946, with prejudgment interest of $182,724.
The SEC's investigation was conducted by Jake Schmidt, Emily Rothblatt, and Trevor Schumacher of the Chicago Regional Office, and was supervised by Jeffrey A. Shank. The litigation was led by Timothy Leiman.