CAMPBELL, Ohio (WKBN) – Campbell’s former mayor has been charged in federal court with defrauding investors out of nearly $1.2 million and related tax violations, according to the Department of Justice.
George Krinos was charged in a two-count criminal information with engaging in a securities fraud scheme and willfully failing to collect and pay taxes for his employees.
The information alleges that Krinos raised more than $1 million through the sale of stock and other notes of his Boardman-based investment firm Krinos Holdings by claiming the funds would help start-up businesses and create as many as 40,000 jobs in the process.
Instead, investigators said Krinos spent tens of thousands on personal expenses.
Rather than disclose these personal expenses, Krinos later characterized them as “sales and marketing” costs in a budget given to his shareholders, according to the information.
Through his company, he allegedly sold false and deceptive practices securities to numerous victims in the Northern District of Ohio. These securities consisted of debenture notes and private placement memoranda that were not properly registered with the U.S. Securities and Exchange Commission.
It was also found that over the course of approximately two years, Krinos improperly withheld and kept approximately $91,495 of his employees’ tax contributions from the IRS.
Krinos abruptly resigned as Campbell mayor in early 2011.