Former United CFO pleads guilty
A former chief financial officer of United Rentals, Michael Nolan, has pleaded guilty to one count of making false securities filings as part of a scheme to inflate the rental company's results and sell off $11 million in shares.
Nolan, 47, entered the plea in federal court in Connecticut. He faces a prison term of 10 years and a $22 million fine, as well as restitution of more than $11 million.
Prosecutors said Nolan filed a report with the U.S. Securities and Exchange Commission in December 2000 that contained earnings-per-share forecasts he knew to be false and misleading.
He and others inflated earnings by misclassifying a lease-buyback transaction that added $25.3 million to revenue and $12.2 million in profits and allowed the company to meet a revised Earnings Per Share target of $1.89 for the 2000 fourth quarter and fiscal year.
Nolan left United Rentals in December 2002 and was replaced as CFO by John Milne, president of United Rentals at the time. Milne was fired in August 2005 for failing to cooperate with the company’s board in relation to the SEC investigation.
In a statement, United Rentals said the events related to Nolan's guilty plea were extensively described in findings of its Special Committee and announced in January 2006 and in its restated financial statements filed in March 2006.
"United Rentals has been fully cooperating with the SEC and the United States Attorney's Office in these matters and will continue to do so," the company added.