A Columbus businessman and his company have been sued by the Securities and Exchange Commission, which claims he failed to disclose an arrest and federal indictment in documents used to obtain $3 million in bonds to buy a West Virginia casket company in 2006.
The defendant, Charles Aiken, said his actions stemmed from directives given him by his former attorney, Chalmer Detling II.
“I just followed the advice of my attorney,” Aiken said.
Detling, 35, of Marietta, settled with the SEC last week. He neither admitted nor denied charges he omitted information, such as his client’s indictment. He agreed to pay more than $38,000 in penalties and interest.
In an email, Detling said he could not comment because Aiken still enjoys attorney-client privilege.
Aiken, 38, and his firm, Aiken Continental, knew or was “reckless for not knowing,” that failing to disclose his arrest and indictment would be misleading to bond issuers, investors and underwriters, the SEC said.
Aiken said his lawyer instructed him to stay quiet about the indictment during the bond preceding.
When Aiken sought the bond financing, his attorney was negotiating a plea deal for Aiken related to charges he and others tried to defraud payroll companies.
Aiken served three months in jail and 90 days home confinement as part of a plea deal for a lesser charge of misprision, or concealment, of a felony.
The SEC said during Aiken’s sentence the casket company struggled; Aiken Continental ultimately defaulted on the debt and currently is not in operation.
The business did not fail because of wrongdoing but because growth happened too rapidly, wiping out cash flow, Aiken said.
Aiken Continental acquired Beckely, W.Va.-based Continental Casket with the help of industrial revenue bonds issued by the Raleigh County government.
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