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Date: 10-19-2019
Case Style:
United States of America v. Hector Absi
Case Number: 2:16-cr-00027-MCE
Judge: Morrison C. England, Jr
Court: United States District Court for the Eastern District of California (Sacramento County)
Plaintiff's Attorney: Lee S. Bickley
Defendant's Attorney:
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Description:
Sacramento, CA - Former Chief Operating Officer of Davis Bio-Pesticide Company Pleads Guilty to Conspiracy to Commit Mail, Wire, and Securities Fraud
Hector Absi, 51, of Las Vegas, Nevada, pleaded guilty to one count of conspiracy to commit mail fraud, wire fraud, and securities fraud.
According to court documents, Absi is the former head of the sales department of Marrone Bio Innovations Inc. (MBI), a company headquartered in Davis, California that produces “bio-based” pesticides. Absi also served as MBI’s Chief Operating Officer from January 2014 until his resignation in August 2014. MBI is a publicly traded company; its stock trades on the NASDAQ exchange under the ticker symbol “MBII.” As a publicly traded company, it is required to file quarterly and annual reports with the Securities and Exchange Commission (SEC). In its reports, MBI stated that it recorded revenue in accordance with generally accepted accounting principles (GAAP).
According to Absi’s plea agreement, in order to increase sales, Absi sold MBI products to customers with side agreements that offered “inventory protection” under which MBI agreed to either repurchase the product from the customer or continue the date by which the customer would need to make full payment for the product. Under GAAP, revenue from sales that include such agreements cannot be recognized on the company’s books at the time of the sales. Between March 2013 and July 2014, Absi conspired with at least one other MBI employee to misrepresent to MBI’s accounting department, its external auditors, and the investing public that MBI had made sales under such terms. By concealing the practice, Absi caused MBI to report a doubling of its revenue in 2013 in comparison to 2012. Absi also conspired to backdate the delivery of certain shipments of MBI’s products to enhance MBI’s reported revenues for the quarter. Absi received a performance-based bonus and exercised stock options during a time when MBI’s inflated revenue figures were being reported.
The Securities and Exchange Commission has also filed a civil complaint against Absi in the U.S. District Court for the Eastern District of California, alleging that Absi violated the Securities Act of 1933, and the Securities Exchange Act of 1934, and federal rules issued under the Exchange Act, and seeking an injunction against Absi, disgorgement of wrongfully obtained benefits, and civil penalties.
This case is the product of an investigation by the Federal Bureau of Investigation.
U.S. District Judge Morrison C. England Jr. is scheduled to sentence Absi on Feb. 20, 2020. Absi faces a maximum statutory penalty of 25 years in prison and a $250,000 fine or twice the gross loss or gain. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Outcome: 10/17/2019 75 MINUTES (Text Only) for proceedings before District Judge Morrison C. England, Jr.: CHANGE of PLEA HEARING as to Hector Absi held on 10/17/2019. The plea agreement was submitted to the Court and filed. The defendant was sworn on his entry of plea and entered a guilty plea to Count 1 of the Indictment. The Court accepted the guilty plea, adjudged the defendant guilty and set sentencing on February 20, 2020, at 10:00 a.m., in courtroom 7. The defendant was ordered to appear for sentencing and a pre-sentence report was ordered to aid in sentencing. The request to vacate the January 9, 2020, Trial Confirmation Hearing and the February 10, 2020, Jury Trial was granted. Government Counsel: Lee Bickley, present. Defense Counsel: William Portanova and Richard Kornfeld, retained present. Custody Status: Present and out of custody. Court Reporter: Diane Shepard. (Deutsch, S) (Entered: 10/18/2019)
10/17/2019 76 MINUTE ORDER (Text Only) issued by the courtroom deputy for District Judge, Morrison C. England, Jr.: If any party wishes to file a sentencing memorandum or motion in advance of imposition of judgment and sentencing, said memorandum or motion shall be filed on or before 5:00 p.m., seven (7) calendar days in advance of the date set for judgment and sentencing. Any response thereto shall be filed on or before 3:00 p.m., (3) calendar days in advance of the date set for judgment and sentencing. The parties are cautioned that if any sentencing memoranda are filed late, the judgment and sentencing date may be vacated, and the matter continued. The personal appearance of the assigned probation officer is required at the sentencing hearing. Counsel are directed to coordinate with the probation officer to ensure he or she is present at the hearing and/or available for any continued hearing dates. If the probation officer becomes unavailable, he or she must advise the Court via an email to the Courtroom Deputy that either another probation officer is prepared to attend the hearing on his or her behalf or that a continuance is being requested. (Deutsch, S) (Entered: 10/18/2019)
10/17/2019 77 SCHEDULE of DISCLOSURE for PSR as to Hector Absi. Plea Date: *10/17/2019* Sentencing Date: *2/20/2020* Reply Date: *2/13/2020*** Correction Date: *2/6/2020* Report Date: *1/30/2020* Objection Date: *1/23/2020* Proposed Date: *1/9/2020* Copies: *AUSA - Defense Counsel - USPO* (Deutsch, S) (Entered: 10/18/2019)
10/17/2019 78 PLEA AGREEMENT as to Hector Absi. (Mena-Sanchez, L) (Entered: 10/18/2019)
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Defendant's Experts:
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