2019-02-12 sec-litreleases litigation_release 66 KB 2,732 chars

SEC v. Kevin R. Kuhnash; and Jason P. Jimerson, No. LR-24397, Southern District of Indiana (Feb. 12, 2019) — Press Release

raw: Kevin R. Kuhnash and Jason P. Jimerson

Kevin R. Kuhnash and Jason P. Jimerson, No. LR-24397 (Feb. 12, 2019)

Caption
SEC v. Kevin R. Kuhnash, et al.
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summary

Kevin R. Kuhnash and Jason P. Jimerson, former executives of Lucent Polymers, Inc., were charged with securities fraud for concealing the company's sham business model, resulting in over $1.9 million in personal gains.

paragraph

The SEC charged Kuhnash and Jimerson with securities fraud for concealing Lucent Polymers' sham business model, which involved falsifying product test data to mislead customers and buyers. The executives allegedly deceived Citadel Plastics Holdings during its 2013 acquisition of Lucent and continued to hide the fraud to secure escrow payments and benefit from Citadel's 2015 sale to a public company. Kuhnash received over $1.3 million and Jimerson received over $600,000 between 2013 and 2015 stock sales.

narrative

The Securities and Exchange Commission (SEC) charged Kevin R. Kuhnash and Jason P. Jimerson, former executives of Lucent Polymers, Inc., with securities fraud for concealing the company's sham business model. Lucent Polymers' business model, which claimed to transform low-grade feedstock into high-quality plastics, was allegedly a huge commercial success, but in reality, the company routinely lied to its customers and falsified its certifications of test data. The executives allegedly deceived Citadel Plastics Holdings during its 2013 acquisition of Lucent and continued to hide the fraud to secure escrow payments and benefit from Citadel's 2015 sale to a public company. As a result, Kuhnash received over $1.3 million and Jimerson received over $600,000 between 2013 and 2015 stock sales. The SEC's civil complaint alleges violations of Sections 17(a) of the Securities Act and 10(b) of the Exchange Act, seeking injunctions, disgorgement, penalties, and officer-director bars. In a parallel action, the U.S. Attorney's Office filed related criminal charges against both individuals.

Enriched metadata

Scheme
accounting-fraud (95%)
Court
Southern District of Indiana
Victim loss
$1,300,000
Entity
Lucent Polymers, Inc.
Classified accounting-fraud(confidence 95%). EDGAR detection: forms 10-K/10-Q/8-K/NT 10-K· recall 80% / precision 48%. detection rule →
Statutes
Section 17(a) of the Securities ActSection 10(b) of the Securities Exchange ActRule 10b-5
Parties
Securities and Exchange CommissionKevin R. KuhnashJason P. Jimerson
Keywords
kuhnashjimersonkevin kuhnashjason jimersonkuhnash jasonplastics manufacturerbusiness modelkuhnash jimersonkevinjasonplasticssecmanufacturerfraudalleges

Exhibits & Attached Documents (1)

Extracted insights

Dollar amounts 2
  • $1.30M $1.3 million $1M–$10M
  • $600K $600,000 $100K–$1M
Entities 2
  • company company
  • organization Company
Triples 17
  • SEC charged two former high-ranking executives of an Indiana-based plastics manufacturer
  • SEC concealing the fact that the company's core business model was a sham
  • SEC charged Kevin R. Kuhnash and Jason P. Jimerson
  • Kevin R. Kuhnash and Jason P. Jimerson concealing that the company's core business model was a sham from potential buyers
  • SEC charged Kevin R. Kuhnash and Jason P. Jimerson
  • Kevin R. Kuhnash and Jason P. Jimerson are former executives
  • Kevin R. Kuhnash and Jason P. Jimerson are executives of plastics manufacturer
  • company had core business model
  • core business model was sham
  • SEC charged two former high-ranking executives of an Indiana-based plastics manufacturer
  • SEC concealing the fact that the company's core business model was a sham
  • Kevin R. Kuhnash charged with fraud
  • Jason P. Jimerson charged with fraud
  • SEC charged Kevin R. Kuhnash and Jason P. Jimerson
  • Kevin R. Kuhnash and Jason P. Jimerson concealed company's core business model was a sham
  • United States v. Kevin Kuhnash and Jason Jimerson
  • Securities and Exchange Commission charged former executives of plastics manufacturer
PDF (from attached: complaint)
Kuhnash and Jason Jimerson – respectively the former Chief Executive Officer and former · Source
Text layers
Extracted body text (2,732c) 
SEC Charges Former Executives of Plastics Manufacturer with Fraud Litigation Release No. 24397 / February 12, 2019 SEC v. Kevin R. Kuhnash and Jason P. Jimerson, No. 19-CV-00028 (S.D Ind. filed Feb. 12, 2019) United States v. Kevin Kuhnash and Jason Jimerson, No. 18-CR-078 (S.D. Ind.) On February 12, 2019, the Securities and Exchange Commission charged two former high-ranking executives of an Indiana-based plastics manufacturer with concealing from potential buyers of the manufacturer the fact that the company's core business model was a sham. According to the SEC's complaint, Lucent Polymers, Inc. premised its business model on its ability to transform "garbage to gold" - that is, to use low-grade, non-prime feedstock to develop high-quality plastics. The company's near-magic "garbage to gold" process, the SEC alleges, was a huge commercial success. However, the complaint alleges that Lucent's business model was a fraud. The complaint alleges that the company routinely lied to its customers and falsified its certifications of test data to show that its products complied with customer specifications, including on important aspects such as fire-retardant measures, when in fact the products did not meet customer specifications. According to the complaint, Kevin R. Kuhnash, Lucent's CEO and Jason P. Jimerson, Lucent's COO, hid Lucent's fraudulent practices and made misrepresentations in the sale of Lucent to Citadel Plastics Holdings, LLC, an Illinois-based plastics manufacturer. The complaint further alleges that, after the sale to Citadel, Kuhnash and Jimerson continued to conceal the fraud in order to secure future escrow payments under the deal and to help secure Citadel's eventual sale, when they would receive additional payments. In March 2015, Citadel's stock was sold to a publicly-traded company. Between the 2013 and 2015 stock sales, Kuhnash received more than $1.3 million, and Jimerson received more than $600,000, according to the complaint. The SEC's complaint, filed in federal court in southern Indiana, charges Kuhnash and Jimerson with fraud in violation of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctions, disgorgement plus interest, civil monetary penalties, and officer-and-director bars. In a parallel action, the U.S. Attorney's Office for the Southern District of Indiana today announced related criminal charges against Kuhnash and Jimerson. The SEC's investigation was conducted by Jake Schmidt, Emily Rothblatt, and Trevor Schumacher of the Chicago Regional Office, and was supervised by Jeffrey A. Shank. The litigation will be led by Timothy Leiman. SEC Complaint
OCR text (2,732c · html-text · 99% conf) 
SEC Charges Former Executives of Plastics Manufacturer with Fraud Litigation Release No. 24397 / February 12, 2019 SEC v. Kevin R. Kuhnash and Jason P. Jimerson, No. 19-CV-00028 (S.D Ind. filed Feb. 12, 2019) United States v. Kevin Kuhnash and Jason Jimerson, No. 18-CR-078 (S.D. Ind.) On February 12, 2019, the Securities and Exchange Commission charged two former high-ranking executives of an Indiana-based plastics manufacturer with concealing from potential buyers of the manufacturer the fact that the company's core business model was a sham. According to the SEC's complaint, Lucent Polymers, Inc. premised its business model on its ability to transform "garbage to gold" - that is, to use low-grade, non-prime feedstock to develop high-quality plastics. The company's near-magic "garbage to gold" process, the SEC alleges, was a huge commercial success. However, the complaint alleges that Lucent's business model was a fraud. The complaint alleges that the company routinely lied to its customers and falsified its certifications of test data to show that its products complied with customer specifications, including on important aspects such as fire-retardant measures, when in fact the products did not meet customer specifications. According to the complaint, Kevin R. Kuhnash, Lucent's CEO and Jason P. Jimerson, Lucent's COO, hid Lucent's fraudulent practices and made misrepresentations in the sale of Lucent to Citadel Plastics Holdings, LLC, an Illinois-based plastics manufacturer. The complaint further alleges that, after the sale to Citadel, Kuhnash and Jimerson continued to conceal the fraud in order to secure future escrow payments under the deal and to help secure Citadel's eventual sale, when they would receive additional payments. In March 2015, Citadel's stock was sold to a publicly-traded company. Between the 2013 and 2015 stock sales, Kuhnash received more than $1.3 million, and Jimerson received more than $600,000, according to the complaint. The SEC's complaint, filed in federal court in southern Indiana, charges Kuhnash and Jimerson with fraud in violation of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctions, disgorgement plus interest, civil monetary penalties, and officer-and-director bars. In a parallel action, the U.S. Attorney's Office for the Southern District of Indiana today announced related criminal charges against Kuhnash and Jimerson. The SEC's investigation was conducted by Jake Schmidt, Emily Rothblatt, and Trevor Schumacher of the Chicago Regional Office, and was supervised by Jeffrey A. Shank. The litigation will be led by Timothy Leiman. SEC Complaint

Related documents (1)