Pegasus Wireless Corp. (fka PGSW)

[PhillyPA65]

Ex-Pegasus Wireless Chief Jasper Knabb Pleads Guilty to Securities Fraud

by Karen Gullo - Jul 28, 2011 9:58 PM ET

Ex-Pegasus Wireless Corp. Chief Executive Officer Jasper Knabb pleaded guilty to securities fraud and other charges in connection with a $25 million scheme to sell shares for bogus debt and funnel the proceeds to himself, family and friends.

Knabb, 44, created 31 fake promissory notes and other documents representing that Pegasus had outstanding debt, U.S. Attorney Melinda Haag in San Francisco said today in an e-mailed statement.

From 2005 to 2008, Knabb caused 490 million shares to be issued to satisfy the bogus debt, prosecutors said. By selling some of the fraudulent shares, he netted $25 million for himself and others, according to the statement.

Christopher Bruno, an attorney for Knabb, didn’t immediately return a voice-mail message seeking comment about the plea.

Knabb, a resident of Wenatchee, Washington, pleaded guilty to conspiracy to commit securities fraud, securities fraud and maintaining false books and records, according to the statement. His sentencing is scheduled for Nov. 3.

The maximum penalty for the conspiracy and securities fraud charges is 25 years in prison and a fine of twice the loss or gain plus restitution. The maximum penalty for the false books charge is 20 years in prison and twice the loss or gain plus restitution.

The case is U.S. v. Durland, 11-00009, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Karen Gullo in San Francisco at [e-mail]

To contact the editor responsible for this story: Michael Hytha at [e-mail]

http://www.bloomberg.com/news/2011-07-29/ex-pegasus-wireless-chief-jasper-knabb-pleads-guilty-to-securities-fraud.html

http://www.businessweek.com/news/2011-07-28/ex-pegasus-wireless-chief-knabb-pleads-guilty-to-fraud.html

http://PegasusEvidence.4shared.com