14.10.2009

Milne found guilty

John Milne, previously president and chief financial officer of United Rentals has pleaded guilty to one count of conspiracy to falsify the company’s books and records and looks set to serve 27 months in prison, following a plea bargain.

According to court documents and statements made in court, Mine admitted that, in 2003, he and others conspired to falsify United’s books and records with respect to the nature of certain payments made to settle obligations incurred as a result of minor sale leaseback transactions. Specifically, in December 2002, Milne executed a contract on behalf of United with Terex relating to United’s obligations under a remarketing agreement that United had with Terex.

In the contract, United agreed to make a payment to Terex to cover losses incurred connection with the leasebacks. In January 2003, United wired a payment of $8,777,172 to Terex, plus a further $4,030,328 in March 2003 to reconcile amounts owed to Terex on a leaseback. The payment requisition falsely noted that the payment was for the purchase of equipment.

Nora R. Dannehy, United States Attorney for the district of Connecticut said: “This case demonstrates that corporate executives who engage in wrongdoing will be held accountable. Federal law enforcement is committed to investigating and prosecuting those who falsify company financial information in order to mislead the investing public.”

Sentencing is scheduled or February 11, 2010, at which time Milne faces a maximum term of imprisonment of five years and a fine of up to $250,000. As part of a plea bargain agreement, the government and the defendant have recommended that the court sentence Milne to 27 months.

“This guilty plea should serve as a warning to other corporate executives that the FBI is vigilant and is working with our federal partners to protect the integrity of our financial markets from manipulative business practices,” said FBI special agent in Charge Mertz.

In order to resolve a separate civil action brought by the United States Securities and Exchange Commission, Milne has agreed to pay a fine of $6.25 million.