By Jonathan Stempel
NEW YORK (Reuters) - A Manhattan jury convicted a former Industrial Enterprises of America Inc chief executive on Tuesday of stealing more than $110 million from the chemicals company and its investors, prosecutors said.
James Margulies, 47, was convicted on 30 felony counts, including grand larceny, scheming to defraud, conspiracy falsifying business records, and violating the Martin Act, a state law used to combat securities fraud.
Sentencing is scheduled for August 9, according to the office of Manhattan District Attorney Cyrus Vance Jr, which announced the conviction.
John Mazzuto, who preceded Margulies as chief executive, pleaded guilty in January to four felony counts over the same scheme. He testified against Margulies at the six-week trial before New York State Supreme Court Justice Gregory Carro. Mazzuto has yet to be sentenced.
Lawyers for Margulies did not immediately return calls seeking comment.
According to prosecutors, Margulies ran a "pump-and-dump" scheme from 2004 to 2008 in which he fraudulently issued 43 million Industrial Enterprises shares totaling more than $90 million and used the proceeds to inflate the Pittsburgh-based company's balance sheet.
They said the Cleveland resident then sold his stock at inflated prices to bankroll a lavish lifestyle, including expensive homes, a $350,000 ring for his wife, a $500,000 vacation club membership and private jet travel.
Investors including an Ohio teachers' pension fund and the Methodist Church lost more than $20 million, prosecutors said.
Mazzuto retired in 2007 as chief executive and Margulies succeeded him for a short time in 2008, having also served as chief financial officer and general counsel, prosecutors said.
Industrial Enterprises filed for bankruptcy protection in May 2009.
Mazzuto testified he and Margulies created bogus minutes of board meetings that never took place and tried to conceal the fraud by falsifying documents of consulting services that were never provided.
(Reporting by Jonathan Stempel; additional reporting by Joseph Ax; editing by Andre Grenon)