A federal grand jury has indicted two former executives of a plastics manufacturer in Evansville. U.S. Attorney Josh Minkler’s office says Kevin Kuhnash and Jason Jimerson allegedly committed fraud when they orchestrated the sale of Lucent Polymers Inc. to another company.
Kuhnash was the chief executive officer of Lucent and Jimerson served as chief operating officer. They are alleged to have concealed critical defects in the company’s business, including fraud that Lucent was committing on its customers.
"Corporate officials who put deviousness over good faith degrade the integrity of our markets and impugn the reputation of American industry," Minkler said in a news release. "This office will continue to prioritize the investigation and prosecution of corrupt corporate executives who enrich themselves through fraud and deception."
Lucent designed and manufactured custom plastics products to customers in a variety of industries. The indictment alleges Lucent created and submitted false records to customers stating that internal testing confirmed the products met the customers’ specifications, when they did not.
According to the indictment, Kuhnash and Jimerson also allegedly tried to sell Lucent to another in 2013, even after they were informed of the company’s deceptive practices, and also did not disclose that information to the company that was acquiring Lucent. The sale went through and in 2015, the acquiring company itself was acquired by a larger, publicly-traded company.
The publicly-traded company later discovered Lucent’s fraud and, upon disclosing that fraud to investors, the company’s stock dropped 25 percent, according to the indictment. Jimerson also allegedly obstructed justice and made false statements to the FBI.
The U.S. Securities and Exchange Commission has also charged Kuhnash and Jimerson with fraud. Minkler’s office says the defendants face possible sentences of up to 5-25 years in prison for each count.