FLORIDA AUCTIONEER PLEADS GUILTY
TO EMBEZZLING FUNDS FROM THE FDIC
Media Contact: Samuel Holland
FDIC Inspector General Gaston L. Gianni, Jr., announced today that Jay
Sugarman of North Miami Beach, FL, President of Jay Sugarman Auctioneers
(JSA), a division of American Auctioneers, Inc., also of North Miami
Beach, and JSA pled guilty on August 16, 1999, to charges of embezzling
$118,130 from the proceeds of auctions he conducted for the FDIC in
the early 1990s. The plea agreement has been filed in the U.S. District
Court for the Southern District of Florida, Miami, FL.
was conducted by the FDICs Office of Inspector General.
as receiver of failed FDIC-insured banks, manages and sells the institutions
assets, including furniture, fixtures and equipment, through auctions
and other means.
The FDIC contracted
with Sugarman and JSA to organize and conduct numerous "absolute"
auctions (in which no minimum opening bid is required) and sales in
the Miami area and elsewhere from September 3, 1990, through February
Sugarman and JSA
received commissions from individual purchasers through a common industry
practice known as a "buyers premium" (a fee added to the
price that a buyer pays for the merchandise). The FDIC paid Sugarman
and JSA only for certain advertising and labor costs associated with
each auction and sale. They were required to remit to the FDIC the
total proceeds from those auctions and sales, minus the advertising
and labor costs and certain credits approved by the FDIC. Sugarman
and JSA were also required to provide the FDIC a recapitulation ("recap")
following each auction and sale, reflecting among other things the
items sold, the winning bid amounts and the total proceeds
from each auction and sale. Sugarman and JSA furnished the FDIC with
recaps from September 13, 1990, through March 13, 1992.
Jay Sugarman pled
guilty to a misdemeanor charge that he embezzled less than $1,000
from the proceeds of an auction he conducted for the FDIC on February
8, 1992. On February 21, 1992, Sugarman submitted to the FDIC a recap
purportedly listing the total proceeds, but which substantially misrepresented
and underreported them. The funds remitted by Sugarman to the FDIC
were based on the fraudulent amount.
entered a guilty plea on behalf of JSA to a felony charge that JSA
embezzled $118,130 from the proceeds of a series of auctions the firm
conducted for the FDIC between September 3, 1990, and February 29,
1992. Following the auctions and sales, JSA submitted to the FDIC
fraudulent recaps, also substantially misrepresenting and underreporting
the total proceeds received from each auction and sale. JSA made payments
to the FDIC based on the fraudulent amounts.
been scheduled for November 2, 1999, in Miami, FL.
the Federal Deposit Insurance Corporation in 1933 to restore public
confidence in the nations banking system. The FDIC insures deposits
at the nations 10,390 banks and savings associations and it promotes
the safety and soundness of these institutions by identifying, monitoring
and addressing risks to which they are exposed.
FDIC press releases
and other information are available on the Internet at www.fdic.gov
or through the FDICs Public Information Center (800-276-6003 or (703) 562-2200).