Ex-GlobeTel CEO Timothy Huff pleads guilty to fraud charge

By Palm Beach Business.com

FORT LAUDERDALE — The former CEO of GlobeTel Communications Corp. has pleaded guilty to a single charge of conspiracy to commit securities and tax fraud.

Timothy Huff, who ran Fort Lauderdale-based GlobeTel in the early to mid-2000s, admitted to scheming with former company CFO Thomas Jimenez to cooking the company books by more than $22.6 million in fraudulent revenue.

To execute the scheme, Huff and Jimenez created fraudulent invoices and technical documents that appeared to corroborate the fictitious revenue GlobeTel was reporting.

Huff and Jimenez fed the bogus records to GlobeTel’s independent auditor as a way of documenting the income the company was supposed to have received.

Also part of the conspiracy, Huff and Jimenez deposited $300,000 into a SunTrust account in the name of a GlobeTel subsidiary and fraudulently recorded the transfer on GlobeTel’s books as a payment by one of the companies customers.

Huff and Jimenez made six additional wire transfers between May 2004 and February 2005 totaling about $980,500. These funds were disguised as the proceeds of a stock-loan transaction between Huff and other GlobeTel executives. In fact, however, the transfers were the proceeds of a fraudulent stock sale.

Jimenez pleaded guilty to the scheme a year ago and is serving a three-year prison sentence. Huff is scheduled for sentencing on July 26.

The SEC in a lawsuit filed two years ago alleged that Huff, Jimenez and another GlobeTel CFO cooked the company books in order to inflate the value of company stock. During one period between 2004 and 2006, 80 percent of all revenue the company booked, or about $119 million, was bogus.

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