REUTERS: Ex-Kit Digital CEO, associate convicted in U.S. of fraud schemes
Ex -Kit Digital CEO, Associate Convicted in US of Fraud Schemes
(Reuters) - The former head of Kit Digital Inc and a business associate were convicted on Tuesday on charges related to what prosecutors said were wide-ranging fraud schemes involving the bankrupt video technology company.
Kaleil Isaza Tuzman, a former Goldman Sachs analyst who achieved brief fame as an internet entrepreneur before becoming Kit Digital’s chief executive, was found guilty by a federal jury in Manhattan of charges including that he conspired to commit securities fraud, prosecutors said.
Omar Amanat, an investor in media, finance and technology companies including at one time the studio behind the “Twilight” movie franchise, was convicted of charges that included conspiring to commit wire fraud and securities fraud.
the government’s opening statement, jurors were told they’d also see
evidence of phony financial statements and numerous discussions about
the frauds in text messages and emails exchanged between Amanat, Tuzman
and Maiden.In one such message, Amanat wrote to Maiden that Tuzman needs to realize "it doesn’t matter who did what" if investors realize the money is gone, Assistant U.S. Attorney Joshua Naftalis told the jury. Amanat then made a reference to "criminal behavior, jail time," Naftalis said. "It doesn’t get more devastating than that," the prosecutor said.
Prosecutors said that in 2008, Tuzman at Amanat’s request arranged for Kit Digital to invest $6.5 million in a fund affiliated with Amanat, Enable Invest Ltd.
To encourage the investment, Amanat told Tuzman he would raise money for a Tuzman-controlled investment vehicle, leading to him arranging for Maiden’s Maiden Capital Opportunity Fund to invest $1 million into it, the indictment said.
The indictment said Tuzman without permission redirected funds from Maiden Capital’s $1 million investment and used the money as part of Kit Digital’s $6.5 million investment in Enable.
Prosecutors said that when Enable suffered losses later in 2008, Amanat helped Maiden conceal them from Maiden Capital’s investors, including by providing loans to repay investors, prosecutors said.