Interior Decorating
Mandell charged a family visit to Walt Disney World in Florida to the company and tens of thousands of dollars on interior decorating for his homes, lavish trips and travel on private jets for himself and his family, Goldstein said.
After one investor, a jeweler, complained, Mandell directed the investor to deliver two Patek Philippe watches to his office which he purchased with Sky Capital funds for $50,000. Mandell directed the transaction be recorded as "consulting fee" paid to the investor, prosecutors said.
During a five-year period between June 2001 and October 2006, prosecutors said Mandell also racked up more than $1.45 million in charges to the Dorchester Hotel in London charged to the Sky Capital corporate account.
Mandell founded Sky Capital in or about January 2001 and served as chief executive officer of both Sky Capital Holdings and Sky Capital Enterprises, as well as serving on the board of various units of the company, prosecutors said.
Harrington worked as a registered broker for Sky Capital from August 2002 until about September 2005, the U.S. said. Goldstein said Harrington was paid $3.1 million for his role in the scheme.
Hoffman, Mandell's lawyer, argued to jurors that his client had complied with SEC regulations and didn't defraud clients.
Misleading Evidence
"The evidence in this case is misleading and tortured," Hoffman told jurors July 21. "He did everything he could. He did what the law required. He did what he thought was right."
Michael Bachner, a lawyer for Harrington, argued during his July 20 closing statement to jurors that some of the cooperating witnesses were drug users who'd lied about their own drug use and therefore weren't credible.
He said the cooperators were also willing to implicate his client because they wanted to avoid going to prison for their own crimes.