LUMBERYARDS

Feds want to seize house built with stolen building materials

BY Brae Canlen

A Northern California man who pled guilty to operating an identity theft ring may lose his house because the building materials were purchased with stolen credit cards, according to an article in the Fresno Bee.

Federal prosecutors are trying to seize the unfinished, 5,500-sq.-ft. house east of Fresno because they claim Ford admitted he sent associates to Home Depot and other stores with stolen credit cards to purchase the building materials used in the project. Ford’s attorneys argue that their client forfeited his interest in the house in his plea agreement, but the home, which was built on land owned by his wife, now belongs to her.

A Sept. 20 civil trial has been scheduled to hear the government’s request to seize the house.   

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Economic outlook for the NBMDA: Recovery mode

BY Ken Clark

An economic outlook report released Thursday for members of the North American Building Material Distribution Association (NBMDA) points to positive trends.

The NBMDA & NAFCD Economic Outlook Report describes the macroeconomic climate as "positive," but growth is expected to slow in the second half of 2011 and into 2012. (NAFCD is the North American Association of Floor Covering Distributors.)

Housing starts are in recovery mode, according to the financial outlook, created by the Institute for Trend Research. The 2011 forecast calls for a 1.9% decline, followed by a 4.2% gain in 2012, and a 3.8% gain in 2013.

According to the report, the housing and nonresidential construction industries can at best expect a mild recovery into 2012. The report stated: "It will take a long time for these markets to fully recover from this recession. Significant recovery for this market is not likely until 2013 and beyond."

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Former Beazer CFO to pay $1.4 million

BY Brae Canlen

The Securities and Exchange Commission (SEC) has announced a settlement with the former chief financial officer of Beazer Homes USA to recover his bonus compensation and stock sale profits from the period when the Atlanta-based home builder was committing accounting fraud, according to an Aug. 30 announcement

According to the SEC’s complaint, filed in federal court in Atlanta, James O’Leary is not personally charged with misconduct, but is still required under Section 304 of the Sarbanes-Oxley Act to reimburse Beazer more than $1.4 million that he received after Beazer filed fraudulent financial statements during fiscal year 2006. The SEC’s settlement with O’Leary is subject to court approval. 

 “Section 304 of the Sarbanes-Oxley Act encourages senior management to take affirmative steps to prevent fraudulent accounting schemes from occurring on their watch,” said Rhea Kemble Dignam, director of the SEC’s Atlanta regional office. “O’Leary received substantial incentive compensation and stock sale profits, while Beazer was misleading investors and fraudulently overstating its income.”

Without admitting or denying the SEC’s allegations, O’Leary agreed to reimburse Beazer $1,431,022 in cash within 30 days of entry of the court order approving the settlement. This amount includes O’Leary’s entire fiscal year 2006 incentive bonus: $1,024,764 in cash incentive compensation and $131,733 previously received from Beazer in exchange for all restricted stock units he received as additional incentive compensation for fiscal year 2006. The settlement amount also includes $274,525 in stock sale profits.

Earlier this year, the SEC reached a settlement with Beazer CEO Ian McCarthy to recover several million dollars in bonus compensation and stock profits that he received. Beazer settled an SEC enforcement action in September 2008, and the SEC charged its former chief accounting officer Michael Rand in July 2009. The litigation against Rand, whom the SEC claims perpetrated the fraud, is still ongoing.

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