Ex-CEO Sentenced to 13 Years in Prison for Defrauding Investors
David P. Godwin, who formerly led the telecom firm ContinuityX, also much pay restitution of $9.3 million.
The former CEO of a publicly-traded telecommunications company who was indicted in 2014 by the Justice Department on charges that he defrauded investors out of millions of dollars has now been sentenced to 13 years in prison, the Securities and Exchange Commission announced Thursday.
David P. Godwin had pleaded guilty to one count of wire fraud and, in addition to the prison sentence, must pay restitution of $9.3 million, according to the judgment in the case filed on Wednesday. He planned to file an appeal, according to a Nov. 4 court document.
The SEC filed a separate complaint against Godwin, the ex-CEO of Metamora, Illinois-based ContinuityX, on Sept. 30, 2015 in U.S. District Court for the Central District of Illinois in Peoria, in part over the same misconduct as the DOJ action, alleging he and Anthony G. Roth, the firm’s former CFO, fabricated nearly all of the company’s revenue while enriching themselves in the process.
ContinuityX went bankrupt and Godwin was criminally charged with six counts of wire fraud by DOJ.
The SEC’s complaint charged Godwin and Roth with engineering a scheme to inflate the company’s revenues. ContinuityX reported revenue of $27.2 million from April 2011 to September 2012, but the complaint alleged that 99% of it came from fraudulent and fictitious sales, according to the SEC.
Godwin and Roth used the allegedly fraudulent SEC filings to raise millions of dollars from investors in a private offering of ContinuityX securities, the complaint further alleged. Godwin received $1.3 million in compensation from ContinuityX and Roth $351,800 in compensation and $456,098 of profits from sales of ContinuityX stock, the SEC alleged.
The SEC’s litigation against Godwin is ongoing, it said Thursday. The SEC’s complaint charged him with violating the Securities Act of 1933 and the Securities Exchange Act of 1934.
The SEC complaint also alleged that Godwin aided and abetted ContinuityX’s violations of the Exchange Act.
The SEC seeks permanent injunctive relief, disgorgement plus prejudgment interest, civil penalties, an officer and director bar under the Exchange Act; and an order requiring Godwin to reimburse ContinuityX.