MIAMI (BNO NEWS) – The former CEO of GlobeTel was sentenced to more than 4 years in prison for charges involving a $22 million securities fraud, prosecutors announced on Monday.

Timothy Huff pleaded guilty to one count criminal Information that charged him with a dual object conspiracy to commit securities fraud and to defraud the United States, the Treasury Department, and the Internal Revenue System (IRS). He was sentenced to 50 months in prison followed by 3 years of supervised release.

Huff was the CEO of GlobeTel Communications, Corp., a company purported to be in the wholesale telecommunications business. Along with Thomas Jimenez, the CFO of GlobeTel, he conspired to create fictitious revenue from Trans Global Ventures, Inc. (TGVI), and GTCC Qualnet Mexico, LLC.

Jimenez and the defendant created fraudulent invoices and technical documents, known as call detail record (CDR’s) to corroborate the fake revenue reported by GlobeTel. Both defendants provided the fraudulent CDR’s to GlobeTel’s independent auditor to mislead other auditors into believing the company had received the purported revenue.

Huff and Jimenez caused GlobeTel to report more than $22,600,000 in fraudulent revenue on its books and in periodic filings with the U.S. Securities and Exchange Commission (SEC). Also, the conspirators deposited $300,000 into a SunTrust account in the name of a GlobeTel subsidiary and fraudulently recorded the transfer on GlobeTel’s books as a payment by TGVI.

In addition, the defendants made six wire transfers between May 2004 and February 2005 for a total of $980,500, as alleged proceeds of a stock-loan transaction between Huff and other GlobeTel executives, when in reality they were proceeds of a fraudulent stock sale.

Finally, Huff and Jimenez caused stock to be issued as compensation to themselves but instead of reporting them as compensation, they disguised the transaction as a loan by transferring it to C&M Management Consulting, Inc.

The defendants knew that C&M would not hold the stock as collateral but would sell it. They fraudulently applied some of the proceeds from the stock transaction to reduce GlobeTel’s accounts receivable. Thereafter, Huff and Jimenez failed report the proceeds of the transaction on their personal tax returns from 2001 through 2004.