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Albany Molecular Research Inc. Message Board

  • poorlake poorlake Feb 22, 2005 9:20 PM Flag

    Tax Fraud

    Was the sell off yesterday related to an ex CFO's tax fraud case. I wonder why they paid him an unrelated $6.9M when he left the company - seems like an Enroneon golden handshake.

    Ex-Albany Molecular CFO pleads guilty in income tax case
    Richard A. D'Errico
    The Business Review
    The former chief financial officer of Albany Molecular Research Inc. faces a 27-month sentence and a $100,000 fine following his guilty plea of filing a false personal income tax return.

    Harold Armstrong Jr., 49, is scheduled for sentencing on June 24.

    Armstrong, who agreed to the 27-month sentence, pleaded guilty before U.S. District Judge David N. Hurd, in Albany, N.Y., on Feb. 17.

    The investigation was conducted by the Internal Revenue Service Criminal Investigation Division.

    Amstrong admitted he failed to properly report his sale of Albany Molecular Research Inc. (Nasdaq: AMRI) stock during tax years 1997 through 1999, saving himself $1.16 million in taxes. He also admitted that he altered an Albany Molecular stock certificate before providing it to Internal Revenue Service investigators to cover up the fact that he was not entitled to a deduction that he had taken.

    Between Aug. 1, 1992 and Oct. 27, 1998, while serving as the Albany company's chief financial officer, Amstrong acquired hundreds of thousands of shares of Albany Molecular stock through the employee stock option plan. He sold 46,100 shares for $299,650, but did not report the long term capital gain of $297,694, saving himself at least $59,539 in taxes in 1997, according to investigators.

    As part of his severance package, Armstrong sold 30,000 shares of Albany Molecular stock for $600,000 but improperly claimed a deduction for that sale on his 1998 tax return saving himself about $299,362.

    When Armstrong left Albany Molecular in 1998, Albany Molecular allowed him to exercise all of his remaining stock options and agreed to pay him a total of $6.9 million, but he did not properly report the income.

    Albany Molecular is a drug-discovery company which is known for making a key ingredient in the allergy medication Allegra.

    The company issued a statement saying the allegations are related to his personal income taxes "and are unrelated to the activities he performed as an employee of Albany Molecular Research Inc. As such, the allegations have no impact on the company's current or previously issued financial statements."

    Armstrong was the company's vice president of finance and operations from August 1992 to August 1997. He was executive vice president and chief financial officer from August 1997 to October 1998.

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