U.S. Securities and Exchange Commission
Litigation Release No. 18739 / June 9, 2004
Accounting and Auditing Enforcement Release No. 2031 / June 9, 2004
FORMER ACCOUNTANT OF CORRPRO COMPANIES AUSTRALIA PTY LTD, PREVIOUSLY SUED BY SEC FOR FALSIFYING U.S. PARENT COMPANY'S BOOKS, SENTENCED TO PRISON TERM BY AUSTRALIAN AUTHORITIES
United States Securities and Exchange Commission v. Greg Waring, Craig Treloar, 1:03CV2030 (N.D. Ohio, Sept. 30, 2003)
The Securities and Exchange Commission (Commission) announced that on May 25, 2004, the honorable Judge Bourke of the County Court of Victoria, Australia, sentenced Mr. Craig Leigh Treloar on criminal fraud charges, following an investigation by the Australian Securities and Investments Commission (ASIC). Treloar, a resident of Wyndham Vale, Victoria, Australia, was sentenced for violations of the Crimes Act (Victoria) 1958 (the Crimes Act) and the Corporations Act 2001 (Corporations Act), to which he had pled guilty on December 1, 2003.
Treloar is the former financial accountant of Corrpro Companies Australia Pty Ltd. (Corrpro Australia), the Australian subsidiary of Corrpro Companies, Inc. (Corrpro), a U.S. public corporation based in Medina, Ohio. Treloar and Greg Waring, the former managing director of the Australian subsidiary, were the subjects of a civil injunctive action filed by the Commission on September 30, 2003 in the United States District Court for the Northern District of Ohio (United States Securities and Exchange Commission v. Greg Waring and Craig Treloar, 1:03CV2030, Polster, J.). The Commission's complaint in that matter alleged that from at least October 2000 through February 2002, Waring and Treloar falsified accounting and other financial records of Corrpro Australia in order to inflate its net income and its net assets so that Corrpro Australia would meet financial performance targets set by managers at the parent company. The Commission further alleged that Waring and Treloar took steps to fabricate documents to be reviewed by the company's independent auditors. On April 2, 2004, the court entered orders by default against both Waring and Treloar. The orders permanently enjoined Waring and Treloar from further violations of certain provisions of the Securities and Exchange Act of 1934. The court's orders also imposed an officer and director bar on both defendants, which prohibits them from acting as an officer or director of any company registered with the Commission.
In the Australian criminal case, Treloar was sentenced to 16 months imprisonment, all of which was suspended, for the Crimes Act charges. Treloar was sentenced to 10 months imprisonment for the Corporations Act charges. However, Treloar will be released without serving prison time, upon entering into a 3-year parole agreement. If Treloar fails to be of good behavior during the 3-year parole period, he risks the possibility of serving his prison sentence, and paying an AD$8,000 fine. Treloar has undertaken to continue to assist ASIC in its ongoing investigation in relation to this matter.
In a separate criminal case, Australian authorities have charged Waring with violations of the Crimes Act and Corporations Act. Waring has not yet entered a plea. The criminal cases against Treloar and Waring both involve the same course of conduct as alleged in the Commission's civil case against Treloar and Waring.
The Commission acknowledges the assistance of the Australian Securities and Investments Commission in its investigation.
For additional information, see Litigation Release Nos. 18382 (October 1, 2003).