L.A. accountant admits he falsified financial reports

Thursday, March 13, 1997 | 11:59 a.m.

A Los Angeles accountant has admitted to falsifying the financial reports of three publicly traded Las Vegas companies and illegally inflating their assets.

Merle Finkel pleaded guilty Wednesday to one count of conspiring to commit securities fraud and bank fraud in connection with EMS Products International Corp., Combined Companies International Corp. and Twenty First Century Health Inc.

Timothy Lee, chief of the Internal Revenue Service criminal investigation in in the Southwest district, said the prosecution of Finkel is part of a larger effort to eliminate money laundering and stock fraud, which he called prevalent in Las Vegas.

The falsified records were filed with the U.S. Securities and Exchange Commission in order to "induce the investing public" into believing the stock was more valuable than it was, the U.S. attorney's office said.

Prosecutors said company officers and others filed false personal financial statements when they applied for bank loans.

However, the three companies declined to comment on the allegations that occurred between August 1992 and January 1995.

Finkel admitted to the conspiracy charge, avoiding the need to indict him. His cooperation with the government enables him to seek a lighter punishment. He will be sentenced by U.S. District Judge Philip Pro.