Los Angeles – Two former Craig executives will have another day in court.
Former Craig president Richard Berger has asked a federal judge to overturn his jury conviction on charges of bank fraud and corporate misconduct. The U.S. Attorney’s office for California’s central district, meanwhile, plans to retry Bonnie Metz, the former Craig VP and international trade director who was also charged in the scandal. The federal jury that convicted Berger was unable to reach a verdict on the charges against Metz.
The U.S. attorney had charged the two for their part in a fraud intended to keep the company afloat while it went public in 1996. The company was liquidated in 1997.Four banks lost about $8 million in a scheme in which Craig inflated its accounts receivables and inventory to borrow more money than allowed under the banks’ line-of-credit agreements. Many investors lost their entire investments in Craig, the U.S. Attorney’s office said.
Berger was found guilty on 12 felony counts, including six counts of loan fraud, one count of conspiracy, and one count of falsifying corporate books. Berger faces a maximum penalty of 30 years in federal prison for each of the loan fraud counts and up to five years for each of the other charges.
The jury wasn’t able to reach a verdict on 24 other counts against Berger but the U.S. is reserving the right to retry him on those charges.
The jury also failed to reach a verdict on all 21 counts against Metz. The charges included conspiracy, loan fraud, wire fraud and falsifying Craig’s books and records.
A third defendant, Donna Richardson, previously pleaded guilty to three counts of bank fraud and cooperated with the U.S. Attorney, which expects a sentencing hearing to be scheduled for Nov. 11.