A federal jury found the former president of a Lexington-based company guilty Friday on all counts of defrauding thousands of investors nationwide of $18 million.
The jury convicted James Norman Turek, 66, of Lexington on eight counts of securities fraud and five counts of tax fraud.
After the verdicts were returned, U.S. District Chief Judge Jennifer B. Coffman found that Turek was a flight risk, and he was taken into custody by a U.S. marshal. Coffman scheduled sentencing for Sept. 27.
Turek faces a maximum prison sentence of 20 years on each count of securities fraud and three years on each count of tax fraud. However, Coffman must consider sentencing guidelines and the applicable statutes before imposing the sentence.
The trial was prosecuted by Department of Justice's trial attorney Kenneth C. Vert and Assistant U.S. Attorney John Patrick Grant. Asked whether any investors will get any money back, U.S. Attorney Kerry B. Harvey said it is "too early to know that."
"Certainly, we will make every effort, using the tools available to us, to try to get restitution for the victims," Harvey said. "We're closer to the beginning of that process than the end."
Defense attorney Elizabeth Hughes of Lexington had no comment.
A 2011 indictment alleged that Turek engaged in a securities-fraud scheme from 2004 to 2006 in which he promoted Plasticon International Inc. stock by releasing false and misleading information about the company. Plasticon, a penny stock company, made recycled plastic products but had few sales, according to a news release from the U.S. attorney's office.
According to the evidence, from 2004 to 2006, Turek lured about 8,500 investors to buy Plasticon stock by falsely claiming that Plasticon was profitable when he knew that the company was losing millions of dollars.
In statements to investors and in news releases, Turek also falsely claimed that the company owned valuable patents.
The evidence showed that Turek told investors that he was working for nothing when he was stealing millions of dollars from Plasticon. Turek stole the money by issuing billions of shares of company stock to himself.
Turek, who was president of Plasticon from about 1994 to 2007, claimed on false and backdated documents that he had previously lent money to the company. To execute the scheme, Turek transferred the stock to the names of friends and relatives, including his deceased aunt, before selling the stock to unsuspecting investors.
The evidence also showed that Turek filed false tax returns from 2003 to 2007 by failing to report about $12 million that he stole from Plasticon.
The trial began June 11. The jury deliberated for about 90 minutes Thursday and for nearly three hours Friday before returning the verdicts.
Harvey said securities and tax fraud cases are "very complicated."
"These cases require a team effort and hundreds of hours poring over thousands of documents, and a lot of good old-fashioned police work coupled with very sophisticated financial analysis," Harvey said.