The Securities and Exchange Commission has filed a complaint against Joseph Apuzzo, former CFO of Terex Corporation, Westport, Conn., for aiding and abetting securities law violations of United Rentals Inc. (URI), Greenwich, Conn., and Michael Nolan, a former CFO of United Rentals. Apuzzo is the second CFO charged in connection with the alleged violations.
The SEC's complaint, filed in the United States District Court for the District of Connecticut, alleges that Apuzzo aided and abetted a fraudulent accounting scheme involving two sale-leaseback transactions, carried out between 2000 and 2002 by URI, Nolan and others. The transactions were structured to improve URI's 2000 and 2001 financial results by allowing URI to recognize revenue prematurely and to inflate the profit generated from the sales.
The complaint further alleges that Apuzzo substantially assisted URI and Nolan in implementing the fraudulent scheme by signing agreements with URI that he knew or was reckless in not knowing were designed to hide URI's continuing risks and financial obligations relating to the sale-leaseback transactions, and directing or approving the issuance of inflated invoices that he knew or was reckless in not knowing URI, through Nolan and others, would use to inflate URI's gain on the transactions As a result of the fraudulent transactions, URI materially overstated its financial results in its Forms 10-K for fiscal years 2000 and 2001, as well as in other filings and public releases.
The Commission acknowledges the assistance of the U.S. Attorney's Office for the District of Connecticut and the New Haven Field Office of the Federal Bureau of Investigation in the investigation of this matter. The investigation is continuing.
Nolan pleaded guilty to federal charges earlier this month. He faces up to 10 years in prison and a fine of up to $22 million.