Columbus Dispatch
3 Guilty in stock fraud case
Ron Carter and Jeffrey Sheban
Dispatch Business Reporters
Three defendants in the Dublin Securities trial were found guilty yesterday of 152 felony counts that could result in lengthy prison terms and heavy fines.
Dublin Securities is a former Worthington penny-stock firm that used a complicated stock transfer scheme to defraud 6,600 investors of at least $14 million before closing in 1992.
Convicted were Beth Eyerman, former president and daughter of the firm's founder, Clarence "Red" Eyerman; Robert Hodge, former general manager; and Dwight Hurd, former legal counsel.
The trial, which began in mid July, was said to be the longest jury trial ever in Franklin County Common Pleas Court and among the costliest to prosecute in Ohio. The state spent about $4.7 million.
Judge William Ammer, a retired Pickaway County judge, scheduled sentencing for Jan. 8. It took Ammer close to an hour to read the 193 verdicts.
Lawyers for Eyerman and Hurd said they will appeal. Hodge's attorney was unavailable for comment. All defendants remained free on bond.
"There were 4.7 million reasons my client was prosecuted, and it had nothing to do with justice," said Mary Jane McFadden, attorney for Beth Eyerman. "This was a surprise. I don't think my client was guilty of these charges."
Eyerman was found guilty of engaging in a pattern of corrupt activity, four counts of grand theft, 34 counts of theft, five counts of selling unregistered securities and one count of false representation. She was found not guilty of 32 felony counts, including conspiracy.
Hodge was found guilty of corrupt activity, aggravated theft, 14 counts of grand theft and 87 counts of theft. He also was found not guilty of conspiracy, and six other felony counts.
Hurd was found guilty of corrupt activity and three counts of false representation. He was found not guilty of conspiracy.
Each corrupt activities count carries a maximum penalty of 25 years and a $10,000 fine; aggravated theft, 15 years and a $7,500 fine; grand theft, 10 years an a $5,000 fine. The other charges carry maximums of five years and a $2,500 fine.
Duke Thomas, a special prosecutor from Vorys Sater Seymour & Pease, said the verdict sent an important message.
"It shows the Division of Securities is serious about fraud and that it will prosecute people," he said.
Roger Synenberg, an attorney for Hurd, said jurors were overwhelmed by the complexity of the five-month trial.
The jury, which deliberated two weeks, heard testimony from more than 100 witnesses and viewed more than 1,000 exhibits. Twenty-five attorneys participated in the trial.
The prosecution said Dublin Securities was selling shares of companies' stock that did not exist. The brokerage had warrants for the stock, but Dublin officials never converted the warrants into stock.
"I respect the jury," Synenberg said. "But the evidence isn't there to convict. We will appeal and win a retrial."
William Wilkinson, another Hurd attorney, questioned tactics used by the prosecution.
"How would you or anyone else in the county feel if the state launched a $5 million investigation of your life and armed it with 15 lawyers working for four years?," he said. "Would that be a fair fight?"
Clarence Eyerman pleaded guilty in December 1994 to charges of racketeering, aggravated theft, grand theft, theft and two securities charges. He died of a heart attack the following month.
Two other former officers have pleaded guilty to various charges and are waiting to be sentenced, while five former salespeople have been indicted by a Franklin County grand jury.
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