Quantcast

PurchasePro Founder Gets 9 Years

Convicted of stock fraud

Get the WebProNews Newsletter:


[ Business]

The founder and CEO of PurchasePro, Charles E. "Junior" Johnson has been sentenced to nine years in prison for stock fraud.

PurchasePro Founder Gets 9 Years

The sentence was less that what federal prosecutors were seeking, who recommended Johnson spend 16 to 17 years in jail for defrauding investors in his now defunct software company in 2001.

U.S. District Judge Liam O’Grady ruled that since Johnson’s crimes happened more than seven years ago, he should be sentenced under less stringent older federal guidelines.

In May Johnson was convicted of stock fraud, witness tampering and obstruction of justice.

Prosecutors charged he was the ringleader in a plan to deceptively inflate PurchasePro’s revenue in 2001. Seven people were convicted in the investigation, which exposed improper accounting practices at AOL, which was once PurchasePro’s business partner.

A total of seven PurchasePro employees, including Johnson, were convicted. Two AOL executives were acquitted on all charges.

Johnson is from Lexington, KY, the home of WebProNews, he made millions in charitable contributions to his hometown, including $2 million for a new gym at Lexington Catholic High School.

Johnson’s defense attorney John Steer said that his client was essentially broke and that the sentencing should be lenient since he failed to profit from the scheme.

  "This is clearly not your typical fraud offense," Steer told the AP. "This was not a pump-and-dump scheme … He did not make a single penny."

 

PurchasePro Founder Gets 9 Years
Top Rated White Papers and Resources
  • http://www.linnetwoods.com Linnet Woods

    Without knowing a great deal more detail it is difficult to judge but it seems to me that, if Johnson really did not profit personally from events, nine years in a penitentiary,  at the tax-paying public´s expense what is more, is a pretty harsh treatment to mete out.

    Surely, it would have been better to fine him a sum of money, payable if necessary over a period of years from future income, than to put him away.

    Judging by the variations in the lengths of sentences in many countries, including the US, it would appear that beating people up and harming them physically is more acceptable than overselling ones´product!

    It´s a pity that, instead of rewarding bankers, mortgage company executives and insurance moguls with annual bonuses, regardless of performance, they don´t send all of them to the pen for almost a decade for having been engaged in doing pretty much the same thing for quite some while now…

    That´s just my opinion, of course :-)

    • Rich Ord

      I agree with you Linnet, 9 years in prison is harsh considering Johnson did not profit personally. Additionally, AOL was just as guilty and got off scott free… not exactly fair and equal justice.

      Rich Ord
      CEO, iEntry, Inc.
      Publisher of WebProNews

    • Guest

      Jeff is the closest and most accurate to what happened.  He personally never sold a share..but he took loans out against his shares.  Then let the banks deal with the sales if the stocks tanked.  He knew what he was doing from the beginning.  All the execs did the same thing.  They were all his pawns – he said jump they asked how high. 

      You can all bash if you feel free but i know all this first hand.

  • Guest

    Although Johnson never sold his stock, he did pledge it for a $100M credit line.  Thus, he was able to use the inflated stock price to obtain a credit line and bought houses, a plane, autos, etc, etc.

    Technically, he never sold stock.  Realistically, he borrowed a great deal of money on the stock and the bank sold the stock.

    In addition, Johnson made a fortune on salary, bonuses, etc.

    If you believe that what Johnson did was the same as what AOL did, you have not read the legal docs, nor do you know what you are saying.

    Jeff

  • Join for Access to Our Exclusive Web Tools
  • Sidebar Top
  • Sidebar Middle
  • Sign Up For The Free Newsletter
  • Sidebar Bottom