An executive of National Century Financial Enterprises pleaded guilty to criminal securities fraud and reached a separate civil agreement with the Securities and Exchange Commission in what authorities are calling one of the largest cases of fraud by a private company. Sherry Gibson, 39, of Hilliard, Ohio, who was employed as NCFE's executive vice president of compliance, faces up to five years in prison and a $250,000 fine in addition to potential civil penalties. Gibson also agreed to a permanent injunction that bars her from serving as an officer or director of a public company. She did not admit wrongdoing. The SEC alleged that Gibson and other NCFE senior officials improperly extended unsecured loans to distressed or defunct healthcare providers, many of which were owned by NCFE or its principals, and concealed shortfalls from investors and auditors by transferring funds between bank accounts. Authorities said they believe investors' losses exceed $1 billion. Other NCFE officials remain under investigation, said Paul Montoya, chief of the SEC's Chicago branch. The company filed for Chapter 11 bankruptcy in November 2002. -- by Mary Chris Jaklevic
NCFE compliance chief pleads guilty to fraud
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