Friday, 06 August 2010 15:24

http://www.newjerseynewsroom.com/state/former-econtent-president-john-sgarlat-sentenced-to-prison-for-fraud-and-money-laundering

The former president of eContent Inc. has been sentenced in federal court in Camden to 66 months in prison on fraud and money laundering charges, according to U.S. Attorney Paul J. Fishman.

The case involving John P. Sgarlat of Harveys Lake, Pa., dates to October 1999, when he was running the publicly traded company.

In pleading guilty in September 2006, Sgarlat admitted that he and other officers misused company funds and credit cards to pay for personal items.

As company president, Sgarlat admitted he issued free-trading eContent stock to "consultants" who performed no services. In one instance, he issued stock to repay a New Jersey resident for a past business relationship.

He also issuede free-trading stock, referred to as Form S-8 registration, to firms and individuals who raised capital, or promoted or made markets for eContent stock. In all, Sgarlat wrongfully issued $590,000 in Form S-8 stock, according to authorities.

In February 2002, Sgarlat opened an account at a Wachovia Bank in Florida under the name of Convergiton Inc., which he used to pay his personal living expenses. At the time, Sgarlat owed substantial taxes, according to Fishman.

Between February 2003 and September 2005, Sgarlat convinced investors from New Jersey and elsewhere to send him $320,000. But instead of investing the money in two companies as promised, he put it into the Convergiton account.

U.S. District Judge Jerome B. Simandle order to forfeit that money, artwork, an autographed Tiger Woods caddie coverall and other items seized by the FBI. The judge ordered Sgarlat to pay $1.5 million in restitution to his victims.