Michael Rand, the former chief accounting officer for homebuilder Beazer Homes, was the subject of a hearing before a federal judge today, The Wall Street Journal reports.
Rand got pinched Tuesday as prosecutors indicted him on 11 charges and said he’d cooked the books at Beazer. Also, per the Journal, he “entered into a secret side agreement with an unnamed company to improperly boost the company’s revenues.”
Beazer Homes was flying high during the housing boom, but shares plummeted from a high of around $80 in 2005-2006 and are now trading in the $3 to $4 range. In the intervening period, the company has been investigated multilple times. Beazer settled civil accounting charges in 2008 and paid $53 million to the government and homeowners for the damage it wreaked during subprime mania.
Rand now carries the unfortunate distinction of being the first Beazer executive to get hit with criminal charges. Prosecutors say he sold 90 model homes to an outside investor for $26.9 million in Beazer revenue. Then, says the Journal, “Beazer then leased the homes back from the investor, with the understanding that both the company and an unidentified co-conspirator would share in the profits when the homes were eventually sold to buyers, according to the indictment.” Then Beazer didn’t report the revenue. Tricky!
Rand also stands accused of manipulating income figures, fibbing on financial statements to get a loan from Wachovia, destroyed emails, and more.