A former executive at ArthroCare Inc. has pleaded guilty for his role in a massive $400 million securities fraud targeting investors in surgical device manufacturers.
Last month, John Raffle pleaded guilty to several charges of white-collar crimes, including conspiracy to commit securities, mail and wire fraud as well as making false statements. During the time the fraud is believed to have occurred, Raffle was working as the head of the company's sales and marketing staff. He has admitted that during his tenure at the company, he and other co-conspirators of the company falsely inflated the company’s sales and revenues figures.
Other former executives of the company have also faced similar charges. The company's former Chief Financial Officer as well as former Chief Executive Officer were also indicted on charges that they falsely boosted revenues of the company. This fraud is believed to have continued between December 2005 and December 2008. The co-conspirators used end- of- quarter transactions with the company’s distributors in order to falsely inflate the revenue figures of the company.
Charges of securities fraud and mail fraud, and other types of investment-related fraud are extremely damaging. Persons, who face these charges, are looking at not just a hefty prison sentence, but a battered reputation and a ruined career. The financial world is strewn with examples of promising careers that were destroyed after allegations of financial misappropriation or mishandling came to light.