Ex-NTG official given year in prison

Chief financial officer of defunct local company also must pay restitution

May 26, 2004|By Stephanie Hanes | Stephanie Hanes,SUN STAFF

A federal judge sentenced the chief financial officer of the former Network Technologies Group Inc. yesterday to a year in prison for his involvement in an accounting fraud that helped destroy the Baltimore telecommunications company.

U.S. District Judge J. Frederick Motz noted that Thomas Bray of Kingsville took responsibility for his actions and cooperated with prosecutors. But the crime, the judge said, "for all the reasons I could pontificate on, has to carry a prison sentence."

Motz also ordered that Bray pay $980,000 in restitution.

Bray, 49, pleaded guilty in February 2003 to wire fraud. The charge stemmed from a scheme in which, prosecutors said, Network Technologies Group swindled millions of dollars from its lender, Mercantile-Safe Deposit and Trust Co., and two investors, Smith Whiley & Co. of Hartford, Conn., and the Abell Foundation of Baltimore.

Bray did not orchestrate the fraud but did not expose the irregularities when he found them, said his lawyer, Gerald C. Ruter.

"This was a crime of omission," Ruter said.

Bray told the judge yesterday that he had thought he could fix the company's accounting problems, then apologized.

"To this day, when I think about the people, the loss involved, I just can't put into words how this affects me," he said.

About 125 workers lost their jobs when NTG closed its Fells Point offices in the summer of 2002.

Bray is the third NTG executive to be sentenced in the case.

Michele Tobin, the company's former chief executive officer, was sentenced last month to nine years in prison and ordered to repay $3.5 million to the bank and investment companies. Beverly Baker, NTGs comptroller, was sentenced to two years in prison.

Network Technologies Group, which court documents say was formed in 1997, installed cable for utility and telecommunications companies, including Comcast Corp., AT&T Corp. and WorldCom Inc.

The company's board of directors found accounting problems, but not the fraud, in the spring of 2002, prosecutors said. Tobin resigned from NTG, and the company hired turnaround specialist John M. Collard as acting CEO.

Collard soon uncovered accounting irregularities. The company had falsified financial statements and had failed to record all of its expenses, making it appear to be almost $2 million more profitable than it was, prosecutors said. That enabled the company to solicit investments and draw on credit lines, prosecutors said.

In July 2002, Collard decided to close the company and report the fraud to law enforcement.

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