PurchasePro Founder Gets 9 Years
The founder and CEO of PurchasePro, Charles E. "Junior" Johnson has been sentenced to nine years in prison for stock fraud.
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."