According to an article in New Orleans CityBusiness, the former CFO of the Orthodontic Centers of America will pay a $100,000 fine to the Securities and Exchange Commission to settle fraud charges.
The SEC filed a complaint February 7 in US District Court for the Eastern District of Louisiana against Bartholomew Palmisano, Jr, of Metairie, alleging he recorded 18 fraudulent journal entries on OCA’s general ledger from 1998 through 2001.
OCA, a dental practice management firm, has since changed its corporate identity to OrthoSynetics Inc.
SEC investigators claimed Palmisano’s fraudulent entries during 12 different quarters had the cumulative effect of creating about $71 million of fictitious revenue. The fictitious revenue was always at least the amount OCA needed to meet Wall Street consensus earnings per share expectations, according to the SEC.
Investigators said Palmisano tried to cover up his fraud in May 2005 by providing false information and documents during an inquiry by OCA’s independent auditors concerning one of the fraudulent journal entries.
"We are pleased that the SEC has brought this suit and resolved its claims against Bart Palmisano, Jr. This represents a closing chapter in the legacy of the old OCA," said Chris Roussos, OrthoSynetics’ president and CEO.
Palmisano is barred from acting as an officer or director of a public company for 10 years. The settlement is subject to federal court approval.
