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Holding Firm CEO Pleads Guilty to Bribing Brokers

Monday, January 14, 2013
The head of a Dubai-based holding company Jan. 11 pleaded guilty to conspiring to bribe brokers in a bid to artificially boost the firm's stock price, federal prosecutors announced that day (United States v. Neuhaus, E.D.N.Y., 12-00439, 1/11/13).

According to the government, Axius Inc. chief executive Roland Kaufmann admitted to conspiring with co-defendant Jean-Pierre Neuhaus to violating the Travel Act, which criminalizes commercial bribery and bars the use of interstate or foreign commerce to further an activity that violates state or federal bribery laws. Kaufmann entered the plea in the U.S. District Court for the Eastern District of New York.

Kaufmann's co-defendant, Jean-Pierre Neuhaus, pleaded guilty to conspiracy charges late last year. Both men are Swiss citizens. Axius is incorporated in Nevada with its main offices in Dubai.

Specifically, prosecutors alleged that Kaufmann and Neuhaus approached an individual they believed “had access to a group of corrupt stock brokers,” but in reality, the person was an undercover agent. The defendants allegedly asked the agent to direct the brokers to buy Axius shares owned or controlled by Kaufmann in return for a “secret kickback.”

In addition, the government said the defendants named the price the brokers should pay and said the brokers could not sell the stock for one year. Kaufmann and Neuhaus allegedly agreed to sell between roughly $3.5 million to $5 million worth of Axius shares in the arrangement.

Kaufmann is scheduled to be sentenced May 17. He agreed to forfeit roughly $299,000 as part of his plea agreement. He faces up to five years in prison.

Last year, the Securities and Exchange Commission also sued Kauffman and Neuhaus, along with Axius. That case is pending in the Eastern District.

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