LIMITED LIABILITY COMPANY CEO CONSENTS TO JUDGMENT

The following is an excerpt from the SEC website:

"On June 13, 2011, the Honorable Reggie B. Walton of the U.S. District Court for the District of Columbia entered a final judgment against C. Gregory Earls, the former chairman and CEO of U.S. Technologies, Inc., in SEC v. U.S. Technologies, Inc. and C. Gregory Earls, C.A. No. 02-2495 (JR) (D.D.C.). Without admitting or denying the allegations in the Commission’s complaint, Earls consented to the entry of a final judgment which imposes injunctive relief and prohibits him from serving as an officer or director of a public company for a period of 20 years. The Commission agreed to forego its claims for disgorgement and civil penalties in light of the judgment against Earls in a parallel criminal case in which he was sentenced to over 10 years in prison and ordered to pay nearly $22 million in restitution.
The Commission’s complaint alleged that from June 1998 through August 2002, Earls misappropriated approximately $13.8 million from investors who believed they were giving Earls money to purchase preferred stock and warrants from U.S. Technologies, Inc. (“UST”). According to the complaint, Earls carried out this scheme through a limited liability company he created called USV Partners LLC. The complaint alleged that Earls falsely told investors in USV Partners that the entity was created solely to purchase and hold UST stock and warrants, and that he would not take any management fees. According to the complaint, Earls lured more than one hundred investors into giving him more than $20 million to purchase UST stock and warrants through USV Partners. As alleged in the complaint, although UST badly needed the capital infusion, only a portion of the $20 million received from USV Partners investors was used to purchase UST stock and warrants. The complaint alleged that Earls misappropriated $13.8 million of investors’ money by paying himself $4.7 million in management fees and $9.1 million that he falsely classified as “Legal and Accounting” expenses.
The final judgment against Earls: (i) permanently enjoins him from violating Section 17(a) of the Securities Act; Sections 10(b) and 13(b)(5) of the Securities Exchange Act and Rules 10b-5 and 13b2-1 thereunder; and from aiding and abetting violations of Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder; and (ii) bars him from serving as an officer or director of a public company for a period of 20 years.
In a parallel criminal action, U.S. v. Earls, 1:03-CR-00364 (NRB) (S.D.N.Y.), Earls was previously convicted of 22 counts of criminal securities fraud, mail fraud and wire fraud, and was ordered to pay restitution of $21,971,628 and to serve a prison term of 125 months, followed by 3 years of supervised release.
This final judgment against Earls concludes the case. The other defendant, U.S. Technologies, Inc., previously consented to a final judgment ordering injunctive relief and, in a related administrative proceeding, a Commission order deregistering the company’s stock.”