Bloomberg News

Ex-Axius CEO Sentenced to 16 Months in Stock Bribery Case (1)

June 14, 2013

The former chief executive officer of Dubai-based Axius Inc. (AXIU:US), who claimed to have ties to Middle Eastern royalty and investor Warren Buffett, was sentenced to 16 months in prison for conspiring to bribe brokers to manipulate the price of his company’s stock.

Roland Kaufman, 60, was sentenced today in federal court in Brooklyn, New York, for one count of conspiracy to travel to engage in commercial bribery. The Swiss citizen, who lived in Dubai, plotted with an associate to bribe stockbrokers to help push up the share price. Kaufman hoped the move would help Axius to sell a skin-care unit for $100 million, prosecutors said.

The former executive was “in a position where you commanded a great deal of respect and you blew it,” U.S. District Judge John Gleeson said during the hearing to Kaufman, who had requested a sentence without jail time. “The point is to hold you accountable in a way that reflects the seriousness of your crime.”

Kaufman and his friend, Swiss financial professional Jean-Pierre Neuhaus, were arrested March 8, 2012, as part of a sting operation. They had been meeting with an undercover federal agent posing as an accomplice, prosecutors said.

Royal Families

In recorded conversations with the agent, Kaufman described himself as “number six in the world” among financial professionals for handling certain transactions, according to transcripts filed with the court in December. He also claimed to have worked on a private placement for Buffett in 1976 and to be an associate of Saudi and Dubai royal families, according to the transcript.

When the agent suggested the possibility that the scheme could lead to an investigation, Kaufman “cut him off, assured him he would feign ignorance, and then suggested he would use his influence with the Saudi royal family to deflect any inquiry,” prosecutors said in a memorandum filed in December.

Kaufman pleaded guilty in January to the conspiracy charge. Neuhaus, who cooperated with the government after his arrest, pleaded guilty to conspiracy in October and was sentenced to time served in February.

Neuhaus was in federal custody for almost a year after his arrest. Kaufman has been allowed to remain free on a $2.5 million bond, according to court records

The case is U.S. v. Neuhaus, 12-cr-00439, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Christie Smythe in federal court in Brooklyn, New York, at csmythe1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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