United Rentals boss charged with fraud

The former president of US machinery hire company United Rentals has been charged by a federal grand jury over securities fraud, conspiracy, insider trading, and falsifying legal documents.

John Milne, worked to artificially increase the company's stock price; conceal its true financial condition - including earnings and earnings-per share figures - from stock-market analysts, the SEC, and the public; and misrepresent its books, records, and accounts to its auditors, according to Nora Dannehy, Acting United States Attorney for the District of Connecticut.

He was charged with three counts of securities fraud, one count of insider trading, and three counts of making false statements. If convicted on all charges, he could face up to 75 years in prison and a fine of up to $13.25 million.

The government also wants him to forfeit more than $17 million, representing his proceeds from the alleged conspiracy and insider trading.

Milne was charged separately with financial fraud. According to the complaint, from 2000 through 2002 Milne and another former United Rentals CFO, Michael Nolan, engaged in a series of fraudulent transactions to allow URI to meet earnings forecasts and analyst expectations.

The regulator alleges that Milne and Nolan carried out the fraud through a series of interlocking three-party transactions, structured as "minor sale-leasebacks," to allow URI to recognize revenue prematurely and inflate profits generated from the sales.

Nolan admitted in December to making false filings with the SEC and faces up to 10 years in prison and a $22 million fine, and he must pay restitution of about $1 million. He also settled fraud charges with the SEC.

Also that month, the SEC charged Joseph Apuzzo, a former CFO of Terex Corp., with aiding and abetting the fraudulent scheme.