{"id":5697,"date":"2014-12-03T00:00:00","date_gmt":"2014-12-03T06:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2014\/12\/sec_claims_fraud_involving_bog"},"modified":"2022-05-06T11:57:27","modified_gmt":"2022-05-06T16:57:27","slug":"sec-claims-fraud-involving-bog","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/sec-claims-fraud-involving-bog\/","title":{"rendered":"SEC Claims Fraud Involving a REIT and Bogus Senior Resident Occupants"},"content":{"rendered":"\n<p>The U.S. Securities and Exchange Commission claims that two ex-executives at Assisted Living Concepts Inc. committed fraud by listing bogus occupants at certain senior residences to satisfy the lease requirements to run the facilities. The regulator is accusing former CFO John Buono and previous CEO Laurie Bebo of coming up with a scam that included bogus disclosures and manipulation of records and books when it started to look as if Wisconsin-based assisted living provider was going to default on covenants in a lease agreement with Ventas Inc., which is a real estate investment trust.<\/p>\n<p>Per the covenants, ALC was obligated to keep up minimum occupancy rates and coverage rations while running the facilities or otherwise default on the lease. A default would have obligated the company to pay whatever rent was due for the lease\u2019s remainder of term, which would have been tens of millions of dollars.<\/p>\n<p>According to the SEC Enforcement Division, to meet covenant requirements Buono and Bebo told accounting personnel to work out coverage ratios and occupancy rates by factoring in phony occupants. These nonexistent occupants included Bebo\u2019s relatives and friends, in addition to previous and former ALC employees (including some who had been fired and who hadn\u2019t yet been officially hired), as well as a seven-year-old \u201csenior resident.\u201d Without this false information, contends the agency, ALC would have not met convenant requirements by substantial margins for several quarters in a row.<\/p>\n<div class=\"read_more_link\"><a href=\"https:\/\/www.investorlawyers.com\/blog\/sec-claims-fraud-involving-bog\/\"  title=\"Continue Reading SEC Claims Fraud Involving a REIT and Bogus Senior Resident Occupants\" class=\"more-link\">Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. Securities and Exchange Commission claims that two ex-executives at Assisted Living Concepts Inc. committed fraud by listing bogus occupants at certain senior residences to satisfy the lease requirements to run the facilities. The regulator is accusing former CFO John Buono and previous CEO Laurie Bebo of coming up with a scam that included [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3759,3760,3795,3761,3741],"tags":[],"class_list":["post-5697","post","type-post","status-publish","format-standard","hentry","category-reits","category-sec-enforcement","category-sec-settlements","category-securities-and-exchange-commis","category-securities-fraud"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>SEC Claims Fraud Involving a REIT and Bogus Senior Resident Occupants &#8212; Investor Lawyers Blog &#8212; December 3, 2014<\/title>\n<meta name=\"description\" content=\"The U.S. Securities and Exchange Commission claims that two ex-executives at Assisted Living Concepts Inc. committed fraud by listing bogus occupants at &#8212; December 3, 2014\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/sec-claims-fraud-involving-bog\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"SEC Claims Fraud Involving a REIT and Bogus Senior Resident Occupants &#8212; Investor Lawyers Blog &#8212; December 3, 2014\" \/>\n<meta name=\"twitter:description\" content=\"The U.S. Securities and Exchange Commission claims that two ex-executives at Assisted Living Concepts Inc. committed fraud by listing bogus occupants at &#8212; December 3, 2014\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards &amp; Kantas, LLP\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"SEC Claims Fraud Involving a REIT and Bogus Senior Resident Occupants &#8212; 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