One of three men implicated in the misappropriation of $2 million from competitive provider SureWest Communications has pleaded guilty to two fraud charges.
According to the U.S. Attorney’s Office for the Eastern District of California in Sacramento, the man, Henry Mead Kaiser of Piedmont, has admitted to his role in the scheme that was discovered by SureWest late last year.
Kaiser was a partner with Larry J. Wells in a venture capital company called Quivira Ventures. According to assistant U.S. Attorney R. Steven Lapham, who is prosecuting the case, the pair used money from SureWest that was transferred into Quivira accounts by Wells’s son, Jeffrey, who was a senior treasury analyst for the telco.
Prosecutors said Kaiser knew at the time of the transfers that the younger Wells did not have authority to make the transactions, which ultimately amounted to about $25 million.
Kaiser told prosecutors the funds were used in the U.S. and Europe to demonstrate to potential partners that Quivira had sufficient funds for its proposed business ventures.
All but $2 million was returned to SureWest.
Kaiser entered a guilty plea April 13 to Judge Morrison England.
Authorities are still building their case against Larry and Jeffrey Wells.