Vincent Farnsworth 7:30 p.m., April 24
Carlsbad underwriting firm charged with fraud
Investors defrauded in municipal bond offering, says SEC
The federal Securities and Exchange Commission (SEC) today (April 29) charged the Carlsbad finance firm of Kinsell, Newcomb & DeDios (KND) with making false statements in a 2008 bond offering by the Victorville Airport Authority. The commission also charged that the Carlsbad underwriting firm misused more than $2.7 million of bond proceeds to keep itself afloat. The federal agency singled out J. Jeffrey Kinsell, owner of the first, and Vice President James L. Williams for their role in making the false statements, along with a former official of Victorville.
According to the agency, in 2008 the airport authority was forced to refinance part of the debt incurred to construct airport hangars, along with other projects, by issuing municipal bonds. The principal amount of the bond offering was based partly on a $65 million valuation of the hangars, even though the Victorville official, Kinsell, and Williams knew that the county assessor had valued the hangars at less than half that amount. The agency says Kinsell learned that the contractor had likely diverted some of the bond proceeds for his personal use. Kinsell stepped in to oversee the project, even though he had no construction experience, alleges the agency. Kinsell and his so-called construction firm took an additional $450,000 in unauthorized fees to oversee the construction and another $2.3 million in fees that the airport authority did not know of, and never agreed to, says the SEC.
More like this:
- Sweetwater underwriters reel in the big one — a grand jury indictment — Aug. 28, 2013
- Complaint alleges overbilling on San Onofre generator replacement — Feb. 14, 2013
- SEC Levels Fraud Charges Against Local Firm — Nov. 10, 2011
- What Did Murphy Know and When? — Nov. 22, 2006
- Taking Stock of the Web — March 25, 1999