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U.S. Department
of Justice
United
States Attorney 1100
Commerce St., 3rd Fl. |
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Telephone (214) 659-8600 |
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FOR IMMEDIATE RELEASE |
DALLAS, TEXAS
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CONTACT: 214/659-8600 www.usdoj.gov/usao/txn |
APRIL 10, 2007
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LAWYER / TAX ADVISOR ADMITS MAKING FALSE DALLAS --- Gary M. Kornman, age 62, a licensed attorney, licensed securities professional, and tax advisor, pled guilty yesterday in federal court in Dallas to one count of making false statements to the U.S. Securities and Exchange Commission (SEC), announced U.S. Attorney Richard B. Roper. The maximum statutory penalties the Court can impose are five years in prison, a $250,000 fine, and restitution. He is scheduled to be sentenced by U.S. District Judge Jorge A. Solis on July 11, 2007. According to the indictment, Gary M. Kornman was an officer of The Heritage Organization, L.L.C. and was a licensed attorney who held Series 6 and Series 63 securities licenses. He operated and controlled Heritage Securities Corporation, a securities broker-dealer registered with the SEC. Kornman sold tax shelters and estate planning services to wealthy individuals and was responsible for the management and operations of Heritage. According to documents filed in Court, Kornman participated in a voluntary telephone interview with investigators from the SEC on October 29, 2003 regarding its investigation into suspicious trading activity engaged in by Kornman. During that interview, Kornman told the SEC investigators that he did not know who possessed trading authority over the brokerage account for a hedge fund through which he engaged in trading activity in MiniMed, Inc. stock in February 2001. MiniMed was a company that was, until its acquisition by Medtronic, Inc. in August 2001, a publicly traded company whose shares were listed on the National Association of Securities Dealers Automatic Quotation National Market System (NASDAQ). Kornman’s statement was false. He knew that he personally possessed trading authority over the brokerage account for the fund through which he conducted the trading activity in February 2001 that was under investigation by the SEC. In addition, Kornman admitted that he made the statement intentionally, knowing that it was both false and material to the SEC’s investigation. Kornman also admitted he made the false and material statement for the purpose of misleading the SEC in its investigation into his MiniMed trading activity. ###
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