Former Crown Corporation, later named Langbar International, chief executive Stuart Pearson has been found guilty of making misleading statements about the asset value of the company.
He has been sentenced to 12 months imprisonment and disqualified as a director of a company for five years. A confiscation hearing has been adjourned until August 1.
Pearson, who was a former partner at Baker Tilly before setting up Langbar in 2004, was found guilty of three counts of making misleading statements by falsely claiming the company had assets held by Banco do Brasil and also that some assets were being transferred to the company.
He claimed that Crown had an asset value of nearly £357m, that it had successfully negotiated the exit of its cash deposits in South America, that US$294m had been transferred to a Langbar account at ABN Amro BV in Holland and that this sum had been admitted to the Euroclear and DTCC trading and settlement custody services.
He also informed the market that the balance of the cash in Brazil was to be transferred to a newly formed subsidiary company, European Property Investment Company, and that Crown was carrying out due diligence on major property investments in Spain and Portugal
These claims, made through the London Stock Exchange in 2005 and personally to investors, were designed to paint the company as an attractive investment and boost its share price.
The Serious Fraud Office says it is unsure how many victims have been affected.
SFO director Richard Alderman says: “This was fraud on a grand scale with scant regard for the essential integrity of the financial markets or for the inevitable losses and misery caused to the investors. Our investigators have worked closely with the City of London Police and the Spanish authorities in what has been a painstaking investigation. I am very pleased that our hard work has brought an offender to justice.”